The Missouri Auto Dealer Magazine

Transcription

WINTER
2006/07
SPRING
2007
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
A S S O C I A T I O N
SPRING 2007
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T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
3322 American Avenue
Jefferson City, MO 65109
573.634.3011
BOARD OF DIRECTORS 2006-2007
Kent Scism, Sam Scism Motors, Inc., Park Hills ............................. Chairman
Paul W. Broome, Broome Cadillac, Inc., Independence ........Chairman–Elect
Jim Trenary, Jim Trenary Auto Group, St. Charles ..................... Vice Chairman
Mike Kehoe, Mike Kehoe Ford, Inc., Jefferson City ......................... Treasurer
Sam Barbee, MADA, Jefferson City.........................................President & CEO
6. President & CEO’s Message
8. Chairman’s Message
10. NADA Director’s Message
14. Counselor’s Corner: Where Shall We Draw
DISTRICT 1
By Sam Barbee, MADA President & CEO
Joseph S. Laukemper, Laukemper Motors, Inc., Mound City
Brent Wyant, Barnes-Baker Automotive, Trenton
DISTRICT 2
By Kent Scism, MADA Chairman
Robert E. Cupp, Cupp Chevrolet, Inc., Marceline
Robert E. Kendrick, Pete Paris Chevrolet, Inc., Monroe City
DISTRICT 3
By William J. Schicker, NADA Director
Scott Milner, G.R. Milner Ford Sales, Inc., Harrisonville
Gregg Smith, Gregg Smith Ford-Lincoln/Mercury, Inc., Clinton
DISTRICT 4
The Line?
Gary Drewing, Joe Machens Ford, Columbia
Jason Hulett, Ron Hulett Automotive, Inc., Camdenton
Mike Kehoe, Mike Kehoe Ford, Inc., Jefferson City
Bill Peach, Fairground Auto Plaza, Inc., Rolla
Larry J. Schenewerk, California Ford-Mercury, California
By Greg Mitchell, Brydon, Swearengen & England, P.C.
18. Prevent Sexual Harassment in Your
DISTRICT 5
Dealership
John Bailey, Bailey Chevrolet-Pontiac-GMC, Willow Springs
Robert Beine, Republic Ford, Republic
Dennis Hanks, Dennis Hanks Chevrolet, Inc., Ozark
Randy Madsen, Don Wessel Honda, Springfield
Randy D. Roper, Roper Pontiac GMC Buick, Inc., Joplin
By Tim Benn, Sentry Insurance
20. Five Essential Rules For Making Money
24. Increasing Your Edge
25. MADA Staff Directory
By Rob Campbell, Mironov, Sloan & Parziale
DISTRICT 6
Denny Christian, Allen Christian Buick-Olds-Pontiac-GMC, Dexter
Jeff Jensen, Barrett-Jensen Chevrolet-Olds, Inc., Fredericktown
Richard R. Kennard, Coad Chevrolet, Inc., Cape Girardeau
By Scott Westfall, GE Security
DISTRICT 7
James A. Feltmann, Jr., Modern Auto Company, Inc., Washington
James Price, Price-Gnade Ford Mercury, Inc., Moscow Mills
DISTRICT 8
Michael Anderson, Chuck Anderson Ford-Mercury, Inc., Excelsior Springs
David A. Boyer, Galen Boyer Motors, Inc., Independence
David Cross, Dave Cross Motors, Inc., Lee’s Summit
Robert Hewlett, III, Metro Ford, Independence
Carlos Ledezma, Cable-Dahmer Chevrolet, Independence
Jeff Littleton, Dave Littleton Ford, Smithville
Cory Matt, Lee’s Summit Mitsubishi, Lee’s Summit
DISTRICT 9
Anne Allmeroth, Reuther Chrysler-Jeep, Creve Coeur
Don F. Brown, Jr., Don Brown Chevrolet, St. Louis
Bob Cerame, Paul Cerame Ford, Florissant
Andy Huey, Huey’s Honda, St. Louis
John Londoff, Jr., Johnny Londoff Chevrolet, Florissant
Carlo Merlo, III, Glendale Chrysler-Jeep, Inc., Glendale
David F. Mungenast, Jr., St. Louis Honda, St. Louis
Ray Mungenast, Dave Mungenast St. Louis Acura, St. Louis
John Schicker, McMahon Ford Company, St. Louis
David W. Sinclair, Sinclair Buick-GMC Truck, Inc., St. Louis
James Sinclair, Dave Sinclair Lincoln-Mercury St. Peters, St. Peters
Frank Sprich, Valley Ford, Inc., Hazelwood
Jim Trenary, Jim Trenary Auto Group, St. Charles
Official Publication of
For advertising information,
contact Don F. Brown: 1.813.914.0383
The Missouri Auto Dealer is a publication of Newsletters Ink and is the official publication of
the Missouri Automobile Dealers Association. The Missouri Auto Dealer is published 4 times
per year by Newsletters Ink.
HEAVY DUTY TRUCKS
SPRING 2007
Katie Hopkins, Truck Centers, Inc., St. Louis
DIRECTORS-AT-LARGE
The statements and opinions expressed herein are those of the individual authors and do not necessarily
represent the views of The Missouri Auto Dealer, or its publisher Newsletters Ink. Any legal advice
should be regarded as general information. It is strongly recommended that one contact an attorney for
counsel regarding specific circumstances. Likewise, the appearance of advertisers does not constitute an
endorsement of the products or services featured by Newsletters Ink.
J.T. Hardy, Schmidt-Hardy Chevrolet, LLC, Cuba
John Reagan, Reagan Honda, Jefferson City
Carey Riley, Riley Toyota-Scion-Cadillac, Inc., Jefferson City
www.mada.com
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DealerConsumer Legal
Relationships
P R E S I D E N T & C E O ’ S
M E S S A G E
I
MADA’s language cleans up the
statutory vagueness the Court relied
on in ruling that any aggrieved
customer of a dealership can now sue
every dealer that came in contact with
the vehicle in question.
n this issue of The Missouri Dealer (also
printed in MADA’s DATELINE on March
23, 2007), MADA’s counsel, Mr. Greg
Mitchell, Brydon, Swearengen & England,
Jefferson City, asks where the line should
be drawn regarding customers suing dealers. MADA is attempting to answer that
question by fi ling some very late legislative
language to redraw the line where it has
been for the past twenty-plus years. Please
page forward and read Mr. Mitchell’s article
on page 14.
Now that you’ve been brought up to speed
on this case, here are the steps MADA has
taking with approximately 1 week remaining in the 2007 legislative session.
As soon as the opinion of the Supreme Court
in the Gibbons case was handed down,
MADA went to work discussing the effects of the opinion, and drafting legislative
language to reverse these effects, which - no
surprise – are negative, to say the least.
MADA’s language cleans up the statutory
vagueness the Court relied on in ruling that
any aggrieved customer of a dealership can
now sue every dealer that came in contact
with the vehicle in question.
SPRING 2007
BY
SAM
BA R B EE
MADA President & CEO
Jefferson City, Missouri
www.mada.com
MADA’s language essentially states the following: no person may bring a private civil
action seeking monetary damages or other
relief against any licensed motor vehicle
dealer with whom such person did not have
a commercial relationship. “Commercial
relationship” shall mean a relationship
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between a person and a licensed motor vehicle dealer which thereby directly results
in the retail sale or lease of a motor vehicle
or other related merchandise from that
motor vehicle dealer to the retail purchaser
or lessee, but shall not include any motor
vehicle dealer in the chain of commerce
with whom the retail purchaser or lessee
did not directly and personally negotiate
or communicate.
This language does not attempt to prohibit
the right of an aggrieved customer to seek
redress from the dealer he or she makes
a direct purchase, but it does specifically
prohibit the customer from suing any other
dealer in the up-stream of commerce who
might have wholesaled the vehicle to the
eventual retailing dealer.
The bottom line effect of this ruling is that
customers have always had an avenue of suit,
under the Missouri Merchandising Practices Act, against a retailing dealer. That will
remain today. And even in the wake of the
Supreme Court’s ruling in the Gibbons case,
the customer’s damages cannot be made
more than they really are; if they continue
to sue any and all dealers, their damages
don’t increase. What does increase is the
pool of prospective defendants an attorney
can sue on behalf of the client/customer.
Remember, the client’s/customer’s damages
don’t increase with the ability to sue more
dealers; however, if any dealer is found to be
■ president & ceo’s message
» continued on page 9
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Legislative
Review
C H A I R M A N ’ S
M E S S A G E
A
Regardless of the outcome of this
year’s session, I want to thank the staff
of MADA and the dealer members of
this fine organization for the painful
task of fighting for, and contributing
to, MADA’s attempts to successfully
achieve its goals for the last, great
entrepreneurial industry - retail new
vehicle sales and service.
s of this writing, there are approximately two weeks to go in the Legislative Session of 2007. I have spent every
other hour of my 24 hour days thinking,
sweating, calling, writing and experiencing
a general nervousness about my, and the rest
of the MADA staff’s, efforts to encourage our
state’s legislative body to act positively on
MADA’s legislative agenda. Regardless of the
outcome of this year’s session, I want to thank
the staff of MADA and the dealer members
of this fine organization for the painful task
of fighting for, and contributing to, MADA’s
attempts to successfully achieve its goals
for the last, great entrepreneurial industry
- retail new vehicle sales and service.
Here is what MADA, hopefully, will be able
to report as passed into law for the benefit
of our industry:
TITLE DESIGNATIONS – An application
for a Missouri title on a motor vehicle previously registered in another state, with
a prior salvage designation, shall carry
forward the prior salvage designation on all
subsequent Missouri titles. Dealers exercising due diligence with respect to titles shall
not be liable despite the fact that the title
was not properly designated. Therefore a
vehicle history report becomes the dealer’s
best “due diligence”.
will be required to present proof of a dealer
garage policy as a condition to obtaining a
dealer license.
DISTINCTIVE DEALER LICENSE NUMBERS – D-Tag number designations will be
modified. “D” for vehicle, powersport &
motorcycle dealer (0-999, franchise only),
“W” for wholesale dealer, “WA” for wholesale auction dealer, “T” for trailer dealer, “A”
auction, “DM” for manufacturer, “M” for boat
dealer and “RV” for RV dealer.
ISSUANCE OF DEALER PLATES – D-Tag
issuance and all other letter designations
are restricted based on sales. Dealers will
be able to obtain one additional tag per every
10 sales annually (Ex. 100 sales per year=10
additional tags available for purchase upon
renewal of dealership license).
RELEASE OF MOTOR VEHICLE LIENS –
Requires lienholders to release liens within
5 business days after the lien has been satisfied. The current law gives the lienholder
10 business days. Increases the fi nes for
noncompliance with the time deadlines by
imposing a graduated liquidated damages
scale for noncompliance with a maximum
amount of $2,500 imposed for each lien not
timely released. The current law provides
for a maximum fine or penalty of $500 for
each lien not timely released.
MOTOR VEHICLE DEALER DEFINITION
– All dealers, for the future, must sell the
required 6 sales per year. Any dealer failing
to do so will not be allowed to renew his/her
license for one year.
FRANCHISE HEAVY DUTY TRUCK DEALERS – Add the manufacturers of heavy duty
truck engine components to the Missouri
Motor Vehicle Franchise Practices Act.
DEALER SURETY BOND – The annual corporate surety bond requirement increases to
$30,000 (currently $25,000).
PROOF OF INSURANCE – All dealers
MERCHANDISING PRACTICES ACT
– Statutorily reverse the decision of the Supreme Court whereby the Court ruled that
consumers can sue, not just the retailer the
BY KENT SCISM
SPRING 2007
MADA Chairman
Sam Scism Ford-Lincoln-Mercury
Park Hills, Missouri
www.mada.com
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■ chairman’s message » continued
consumer directly purchased an item from, but also any other business wholesaler in the up-stream of commerce regardless of whether
there is a relationship between any of the other business and the
ultimate consumer.
MOTOR VEHICLE EXTENDED SERVICE CONTRACTS – Tighten
up the law on the direct selling and marketing of these products, as
well as move the statutory authority of these existing laws under the
chapter pertaining to the MO Department of Insurance.
■ president & ceo’s message » continued
at fault for as much as $1 of any claimed damages, the attorney for that
client/customer legally gets his fees. So, one more time, if the client/customer sues four dealers in four different cases (the retailing dealer and
three others) his/her damages aren’t quadrupled, but…if the damages
equal $50,000 and the other three dealers are found to be responsible
for even as little as $1.00 each, the attorney gets to recover his fees in
each of the cases. In addition, depending on the facts of each case, a
customer could recover punitive damages against each dealer.
Where do you think the line has been drawn?
SPRING 2007
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CAFE Plus:
N A D A
D I R E C T O R ’ S
M E S S A G E
Let’s Add an Incentive
Editors’ note: This commentary by NADA President Phil
Brady first appeared in the April 23rd edition of Automotive News.
T
he winds of climate change are blowing hard in the halls of Congress these
days (and even in the Supreme Court),
with the focus shifting from documenting
the problem to coming up with potential
solutions.
Government should not be in the business of picking technology winners and
losers. The best technological solutions
The record number of hearings (25 so far)
and bills (50 and counting) in the House and
Senate provides a timely opportunity for the
automobile industry to offer constructive
proposals.
are market-driven. CAFE Plus Incentive
Curves would have the advantage of
being both technology-neutral and
market-driven.
Appropriately, many of the proposals for
dealing with global warming envision
a comprehensive national energy policy,
rather than one that focuses just on the
transportation sector.
Former Vice President Al Gore’s recent congressional testimony acknowledged that the
auto industry by itself cannot solve global
warming. In the effort to reduce the nation’s
dependence on foreign oil and to address
climate change, all segments of the economy
must contribute their fair share. Having said
that, I must add that the auto industry has
an important role to play.
One thing is certain: Since the U.S. economy
is consumer-driven, the most effective way
to meet policy goals without disrupting
the market would be to harness consumer
demand with incentives that leverage buying habits.
B Y
WIL L IAM
J .
S C H I C K ER
SPRING 2007
NADA Director
McMahon Ford Company
St. Louis, Missouri
www.mada.com
After all, it’s not just about technology. And
it is not just about mandated results. It’s also
about what vehicles consumers will buy to
meet their wants and needs. If government
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mandates miss the mark, consumers and
businesses will keep their older and lessefficient vehicles longer.
As this national debate evolves, policy makers must remember that automobiles are a
necessity of modern life.
Equally important, a strong automotive
industry—manufacturing and retailing—is
essential to the nation’s economic health.
Within that context, what should be done?
A better approach
Policy makers should focus on the 250 million vehicles in the existing fleet. Why? Because it’s important to ensure that the cars
and trucks already on the road are being
operated as efficiently as possible.
Policies to achieve that objective should
include initiatives to ease traffic congestion and a national consumer education
campaign that would highlight how driving
habits and vehicle and tire maintenance can
increase fuel economy.
But the next generation of vehicles also
must be addressed, and the place to start
is reform of the corporate average fuel
economy program. The current single
fleetwide standard for cars pushes manufacturers to build smaller vehicles that can
be less safe and often not what the public
wants to buy.
There is a better approach. Congress should
adopt the recommendation of the National
Highway Traffic Safety Administration to
grant the agency the authority to replace
the current car standard with a rule that
improves fuel economy for all vehicles in
the mix.
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Last year, NHTSA adopted just such an innovative method for light
trucks. The light-truck standard establishes a mandatory CAFE performance curve with fuel economy targets that vary by vehicle size.
Using an attribute-based curve for cars, as suggested by NHTSA,
would offer similar increases in fuel economy without compromising
safety or swimming upstream against consumer demand.
CAFE plus incentives
But Congress also should consider linking fuel economy policy goals
with the power of consumer choice. How? By creating what could be
called CAFE Plus Incentive Curves for cars and light trucks.
Using the same methodology that it employs in setting the CAFE
mandate curves, NHTSA would establish incentive curves with fuel
economy targets for individual models that would be well above those
on the mandate curves.
When a new car or truck meets one of those beyond-compliance
targets, the federal government would give customers who buy that
vehicle a meaningful tax credit. Under that plan, government funds
would be spent only if vehicles that meet those higher fuel economy
objectives are produced and sold.
As demonstrated by the success of the gas-electric hybrid credit,
tax incentives work. Incentives, however, should not be limited to
hybrids or any other specific design.
Government should not be in the business of picking technology winners and losers. The best technological solutions are market-driven.
CAFE Plus Incentive Curves would have the advantage of being both
technology-neutral and market-driven.
By responding to the needs of the buying public, that approach would
encourage fuel economy gains well beyond the mandated levels. After
all, the consumer ultimately will decide the success or failure of a
reformed CAFE program. And it’s in no one’s interest for dealership
lots to end up full of cars and trucks that no one wants.
In other legislative news...
Lott, NADA Beat Drum for Bill on Katrina Cars
David Regan, NADA’s vice president for legislative affairs, said his
group supported a bill sponsored by Sen. Trent Lott (R-Miss.) that
would require auto insurers to provide vehicle information to a
searchable database when they declare a car or truck a total loss.
Lott said he wants interest groups and fellow lawmakers to press
for the insurance industry changes before memories of Hurricane
Katrina fade.
■ nada director’s message » continued on page 12
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SPRING 2007
The goal is to protect consumers and dealers from unknowingly acquiring flood-damaged or wrecked vehicles that have been repaired
and given new titles.
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■ nada director’s message » continued
Regan said NADA supports the bill because “we think there are
instances every year in which vehicles declared a total loss are not
retitled as salvage or flooded, and dealers want to know what they’re
buying at auctions. There is concern because there are reports that
Katrina vehicles are circulating at the wholesale level, where reconditioned cars are auctioned to dealers.”
Lott, the No. 2 Republican in the Senate, said he fears the impetus
for insurance reform will be lost unless action is taken soon. Lott’s
remarks came at a Senate Commerce Committee hearing this month
on the insurance industry and its responses to natural disasters.
In NADA news...
NADA’s Flagship Web site Enhanced with New Tools, Features
NADA has unveiled a series of new features on its recently redesigned
Web site, www.nada.org.
The home page of the
NADA Web site now offers even more news and
information designed for
the business-savvy dealership. Visitors to the site
now receive a comprehensive
industry snapshot, including
the following features:
A display of the main stock
market indices: the Dow, NASDAQ, S&P, 10-year Treasury,
and composites for automobile
manufacturers and publicly traded automobile dealers;
Customized weather information;
Links to major newspapers, magazines, broadcast networks and
wire services; and
Links to major airlines and popular travel sites.
These resources are more good reasons to make www.nada.org your
home page of choice. To set your Internet Explorer browser to display
the nada.org home page automatically, open Internet Explorer, then
from the top select “Tools,” then “Internet Options.” Once the “Internet
Options” pop-up box appears, look under the “General” tab for the
“home page” heading, where you can choose your home page. Type
www.nada.org in the “Address” field, then click the “OK” button to
save your changes.
SPRING 2007
Pennsylvania Dealer Wins Dealer
Innovation Award
USA Today and NADA in April presented the Dealer Innovation
Award to Kim Maxwell, general manager of Hill International Trucks
LLC, Washington , Pa.
www.mada.com
D E A L E R S
The USA Today Dealer Innovation Award is given out each year to a
new car or truck dealer who has implemented effective initiatives that
result in measurable improvements for their business and employees,
as well as for the community. The theme for this year’s award was
energy conservation.
Maxwell was chosen for building a state-of-the-art dealership that is
three times larger than his previous store, yet costs 77 percent less per
square foot in energy to operate. He achieved these energy savings by
implementing dual waste-oil furnaces used in an ambient floor heating
system; a wash water recycling system; light-colored roofing material
to reflect solar heat; air-locked door systems; dual-pane tinted glass;
and fluorescent and metal halide lighting schemes.
Maxwell was selected as the award winner from among four finalists. The other finalists were Pat Lobb, owner of Pat Lobb Toyota
in McKinney , Texas ; Gordon Moore, vice president of McCormick
Chevrolet in Nappanee , Ind. ; and Jeff Morrill, owner of Planet Subaru
in Hanover , Mass. Maxwell is the first truck dealer to receive the
award in its six-year history.
Energy Star Program Helps Dealers Turn
Green
Dealers can move toward green solutions with help from a partnership
between NADA and the Environmental Protection Agency’s Energy
Star program. The program offers a variety of cost-effective retrofit
and new construction strategies involving energy efficient lighting,
climate controls, equipment, and building design. Many of those
strategies reap considerable cost savings. NADA’s A Dealer Guide to
Energy Star: Putting Energy Into Profits can be ordered for $30 by
members or $50 by non-members by calling 800.252.NADA Ext. 2.
Spring is a Great Time to Team Up With
NCAA Athletes
Thousands of NCAA athletes will graduate from college over the next
few weeks and will join the more than 500,000 former collegiate and
pro athletes around the country who are looking for rewarding and
challenging careers, such as those offered in dealerships.
To help dealers recruit and retain a high caliber of talent,
NADA has partnered with the Collegiate Recruitment Team
(CRT), which helps former NCAA student athletes find jobs.
For a one-time fee of $25, dealers can advertise an unlimited number
of open positions on the CRT Web site. In addition, CRT and its
foundation will give any NCAA alum $2,000 toward the purchase of
a new or used vehicle at a registered dealership. To register:
Visit www.crtjobs.org;
Click on “Employers” in the upper right corner;
Choose “Click here to register”;
Complete the required information and choose “Submit;”
Choose “Pricing Plans,” then “NADA Plans,”
Complete and submit payment information
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***SPECIAL ANNOUNCEMENT***
RUSH LIMBAUGH & MADA
“Top Talk Radio Host”, Rush Limbaugh featured at the MADA Convention
June 17-22, 2007
The Ritz-Carlton, Naples – Naples, Florida
W
e invite and encourage you to attend
the 2007 MADA Convention.
Don’t miss this opportunity to SEE and
HEAR native Missourian, Commentator,
Author, and Television Personality, Rush
Limbaugh! Born in Cape Girardeau,
Missouri, Limbaugh is a self-described
conservative, discussing politics and
current events on his program, The
Rush Limbaugh Show. He has been
credited by some with reviving AM radio
in the United States, and in 1992, Talkers
magazine ranked him as the greatest guest
radio talk show host of all time.
Limbaugh was the 1992, 1995, 2000 and
2005 recipient of the Marconi Radio Award
for syndicated Radio Personality of the
Year (given by the National Association
of Broadcasters), joining only one other syndicated show as a four-time winner of this prestigious
award. He was inducted into the Radio Hall of Fame in 1993.
Rush will be featured at the Wednesday evening Banquet and Awards Program honoring MADA
President, Kent Scism, Sam Scism Motors, Inc.
4/07
If you have any questions about your reservations, call Rosella or Russ at (573)634-3011.
Mail this registration form to MADA, P.O. Box 1158, Jefferson City, MO 65102 or Fax to 573-636-5834.
Online registration is available at www.mada.com.
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T
Where Shall
COUNSELOR’S CORNER
We Draw The
Line?
By Gregory C. Mitchell
On February 21, the Supreme Court of Missouri heard
arguments in a case that may result in one of the more
significant court decisions to date affecting Missouri
SPRING 2007
motor vehicle dealers.
he case, Rodney D. Gibbons v. J. Nuckolls,
Inc. d/b/a Fenton Auto Sales, Case No.
SC 88023, is poised to answer the
question of whether a consumer plaintiff
may invoke the Missouri Merchandising
Practices Act (sections 407.010 et. seq.,
RSMo.) to sue not only the retail dealer
of a motor vehicle allegedly misrepresented to him, but also the wholesale dealer
from which the retail dealer originally
obtained the vehicle – even though the
consumer/plaintiff had no dealings or
communications whatsoever with the
wholesaler involving his purchase of
the vehicle.
The implications of allowing disgruntled consumers to sue “up the chain
of commerce” beyond the retail dealer,
absent any “privity” or “nexus” between
the consumer and the wholesale dealer,
are enormous. Who among licensed
Missouri dealerships has not, on an occasional or frequent basis, wholesaled
motor vehicles on down the line for
ultimate sale to a consumer by another
dealership? The Plaintiff/Appellant’s
position in the Gibbons case, if accepted,
would mean that any wholesale transaction by a Missouri dealership could
potentially result in the payment of
civil monetary damages by that dealership, even if the wholesaling dealership
(as is usually the case) has nothing to
do with the retail sale of the vehicle to
a consumer, and even though the wholesaling dealership can have no control
over whatever representations or misrepresentations might be made to the
consumer by the retail dealership. And,
even if the wholesale dealership in such
a lawsuit is ultimately exonerated of any
misrepresentations or failure to disclose
material information to the retail seller
during the wholesale transaction, the
wholesale dealership will likely expend
considerable time and resources in litigating these issues.
■ draw the line » continued on page 16
www.mada.com
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■ draw the line » continued
The facts of the case, as alleged by the Plaintiff, are straightforward. Gibbons alleges
that in late December, 2004, he purchased
a 2003 Honda Accord from a Missouri
dealership holding a Honda franchise agreement. He alleges that during negotiations
leading to this purchase, he asked the sales
representative if the Accord had ever been
involved in an accident and was told “no.”
Later on, Gibbons alleges that he discovered
the Accord had in fact been involved in a
front-end collision, and that this damage
occurred prior to the time that the retail
dealership acquired the Accord from the
Defendant/Respondent, Fenton Auto Sales
(“Fenton”). Gibbons alleges that Fenton:
SPRING 2007
“. . . used deception, fraud, false pretense
. . . misrepresentation or unfair practice,
or concealed, suppressed, or omitted a
material fact in connection with the sale
of the [Accord] when . . . they failed to
disclose existing accident damage to [the
retail Honda dealership] about which they
knew, or, upon reasonable inspection, should have
known, and when they further knew or had reason
to believe that [the retail Honda dealership]
was not likely to disclose the accident damage to a
consumer prior to sale.”
Think, for a moment, about the burden
that the highlighted language above would
place on your dealership in the context of
wholesaling vehicles to other dealerships
– if this standard were to be adopted, your
dealership would essentially become an
“insurer” of all vehicles you sell at wholesale, regardless of what you knew or did
not know about anything that might have
happened to a vehicle in the time before
you wholesaled it, and regardless of the
simple fact that you have no way of controlling what the retailing dealership might
or might not represent about the vehicle
to the retail consumer. But, you say, I
always wholesale my vehicles “as is” with
documentation to that effect? Don’t count
on that to protect you from the theory of
liability being sought in this case – under
the proposed theory, you as wholesaler will
www.mada.com
with equally numerous cross-claims and
counter-claims to sort through, ultimately
rewarding nobody except, possibly, the
lawyers. Thus, where would the “line” be
drawn, if at all?
If civil liability can extend to wholesalers
having no connections at all with the retail
consumer, then logically such liability could
also extend to even more remote parties in
the chain of commerce – to the person or
entity from whom the wholesaling dealership obtained the vehicle, all the way back to
the owner who was driving the vehicle when
it incurred the damage that has prompted
today’s consumer to bring suit.
share or assume the liability resulting from
any misrepresentation of the vehicle made
by the retail dealership, even though you
would have no way of even knowing who
that customer was until you are served
with process in his lawsuit.
Finally, if civil liability can extend to
wholesalers having no connections at all
with the retail consumer, then logically
such liability could also extend to even
more remote parties in the chain of commerce – to the person or entity from whom
the wholesaling dealership obtained the
vehicle, all the way back to the owner who
was driving the vehicle when it incurred
the damage that has prompted today’s consumer to bring suit. Such a scenario makes
it easy to envision unwieldy and protracted
litigation, involving numerous parties
16
For all of these reasons and more, MADA
sought and was granted permission by
the Supreme Court to enter the case as
an “amicus curiae” (“friend of the court”)
party, which allowed us to file a brief, on
behalf of MADA members, expressing
our general policy concerns arising from
the extension of liability being sought by
the Plaintiff in this case. MADA’s Amicus
Brief was timely filed and became a part
of the Supreme Court’s record in this case,
even prompting a few questions from the
Judges during oral arguments. For those
interested, MADA’s entire Amicus Brief,
as well as all other briefs filed in the case,
can be accessed at http://www.courts.
mo.gov/page.asp?id=1977 and clicking on
the link for cases docketed on February
21, 2007.
It typically requires a matter of months,
following oral arguments, for the Supreme
Court to hand down its opinion in cases it
hears. Therefore, at this writing we do not
know how the Court will rule on this issue.
However, MADA will closely monitor the
case for the Court’s decision and will update
the membership when possible.
For more information contact Greg
Mitchell at Brydon, Swearengen
& England. Phone: (573) 6357166, ext. 125. E-mail: gregbse@
brydonlaw.com. Greg Mitchell is
a former law clerk to a federal
magistrate, Assistant Attorney
General of Missouri, and was
Executive Director of the Missouri
Motor Vehicle Commission, a state
agency which was responsible
for the licensure and regulation
of Missouri’s motor vehicle sales
industry. He is general counsel for
the Missouri State Board of Chiropractic Examiners
and the Missouri Power Sport Dealers Association.
He has a general administrative practice with
an emphasis in motor vehicle dealer matters,
professional licensing and corporate regulatory
issues. The Jefferson City law firm of Brydon,
Swearengen & England P.C. serves as General
Counsel to MADA.
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
Prevent Sexual
Harassment in Your
Dealership
By Tim Benn
• The harasser can be the victim’s supervisor, an agent of the employer, a supervisor in another area, a coworker or not an
employee.
• The victim does not have to be the person
harassed, but could be anyone affected by
the offensive conduct.
• Unlawful sexual harassment can occur
without economic injury to the victim or
employment termination of the victim.
• The harasser’s conduct is unwelcome.
When investigating allegations of sexual harassment, the EEOC takes into consideration
many factors, including reviewing the nature
of the sexual advances and the context in
which the alleged incidents occurred, on a
case-by-case basis.
Establish A Formal Policy
To prevent sexual harassment at your
dealership, fi rst establish a formal policy
prohibiting sexual harassment. Clearly
indicate the type of actions that could be
construed as harassment and what steps
employees should take if they are harassed.
Appoint a senior executive to administer the
policy, and routinely communicate the policy
through bulletins, articles in the company
newsletter, regularly scheduled meetings
and training programs.
Sexual harassment is a subject no company can afford to ignore.
In 2005, the Equal Employment Opportunity Commission (EEOC)
received more than 12,000 sexual harassment claims and negotiated settlements totaling $47.9 million.
SPRING 2007
S
exual harassment is defined as unwelcome sexual advances, requests for sexual favors, and other verbal or physical
conduct of a sexual nature that explicitly or
implicitly affects an individual’s employment;
unreasonably interferes with an individual’s
work performance; or creates an intimidating, hostile or offensive work environment.
Examples of sexual harassment would be
when a supervisor implies an employee must
engage in sexual relations with the supervisor to keep his or her job; an office clerk is
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made uncomfortable by the sales manager,
who regularly tells sexually explicit jokes;
or a service technician sends unwelcome
e-mails to co-workers that contain sexually
explicit content.
According to the EEOC, sexual harassment
can occur in a variety of circumstances, including but not limited to:
• The victim, as well as the harasser, can be
a woman or man. The victim does not have
to be of the opposite sex.
18
Make it easy for complainants to bring matters to the attention of management. Post or
distribute notices detailing to whom and how
employees should address complaints. Train
your managers, supervisors and employees on
conduct that might constitute harassment,
and on your dealership’s anti-harassment
policy and complaint procedures.
Investigate All Complaints
All complaints should be taken seriously.
Regardless of how trivial or unjustified they
may appear, investigate every complaint. And
be sure to keep written records of all findings.
You should not terminate an employee for
fi ling a complaint.
Respond Appropriately
Avoid making rash decisions – analyze the
facts, consult your attorney and take action
if necessary.
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
If the complaint is justified, correct the situation. If an investigation
finds the complaint was not justified, explain the decision carefully
and diplomatically to the employee who fi led the complaint. Keep in
mind that if he or she is not satisfied, a charge can still be fi led with
the EEOC or a state equivalent.
Don’t look for an easy way out. Transferring the harasser to another department may solve the immediate problem, but if the harasser repeats
the offense in the new assignment, the situation is compounded.
Finally, remember that it is unlawful to retaliate against an individual
for opposing employment practices that discriminate based on sex or
for fi ling a discrimination charge, testifying, or participating in any
way in an investigation, proceeding, or litigation under Title VII.
Implement these steps to create a zero-tolerance policy on sexual
harassment in your dealership. Doing so will help minimize your exposure to a potentially costly sexual harassment lawsuit.
Tim Benn is Manager of Client Services at Sentry Insurance. Sentry is a leader in
providing specialized business insurance solutions for auto dealerships. For more
information, you can contact Tim at 715-346-8478 or tim.benn@sentry.com.
Questions can be directed to Sentry Insurance Safety Services at 800-443-9655
or visit Sentry.com.
SPRING 2007
19
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
Essential
Rules For
Making Money
In Your Service Department
By Rob Campbell
Let’s be clear before we start. Your answer to
more profits from your service department is
not to bow at the altar of more “hours-per-repair order.” Sustainable growth does not come
from having average repair orders that are
greater than your customer’s mortgage. Real
improvements come from looking at ways to
make more with what you have. Below are five
ways to get started.
Don’t
stop reviewing the basics.
People don’t like spending time on the
basics because they are – well – the basics.
For some reason most people equate basics
with boring, and because of this repulsion
they are often the most ignored. Review
your effective labor rate and gross profit
constantly. Check your pricing, especially
on your service menus. And watch pricing
overrides like a hawk. If you aren’t running a labor pricing override report on a
weekly basis, you are probably needlessly
losing money.
Get out of your chair and get in the
During the recession of the early nineties, I was at a dealership
struggling to keep the doors open. I kept thinking to myself, if
only I had a better facility with better equipment, I’d be able to
make more money.
O
SPRING 2007
r if I could just pay a little more we could
recruit a superstar technician. Or if
I just had a hot franchise, customers
would be falling over themselves to come to
the dealership.
Sure enough that dealership did go out of
business and in quick order I found myself
working at a modern facility with great technicians and a popular franchise of the day. A
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drive. No manager I have ever met has
made a success of his/her department via
the computer in their office. If you want
to improve performance, spend a few days
in the service lane or at the write-up desk.
It works better if you don’t tell anyone why
you are suddenly out of your office and
watching the lane. Some administrative
work is necessary but keep it in moderation. Roam around, get involved, write
some tickets, do something real crazy like
an oil change – almost anything other than
being sequestered in your office.
The quickest path to long-term redream job; until it was soon discovered that
the grass wasn’t any greener and that it was
still work – hard work – to make money.
The lesson learned was that no matter what
your circumstances, improvements cannot
wait for the “perfect” situation. There is
always more money to be made if you are willing to look at your shop with fresh eyes and
find the incremental improvements that will
add to the departments’ bottom-line.
20
sults is from courtesy inspections.
That might sound like an oxymoron, but
if you want more business today and tomorrow then doing good, accurate vehicle
inspections on every vehicle, every time is
the means.
Where shops fail is they don’t think there
is any need to perform an inspection on a
brand new vehicle in for its first service.
That is because they are conditioned to
■ 5 essential rules » continued on page 22
T H E
M I S S O U R I
■ 5 essential rules » continued
think the only purpose of the inspections
is just to look for up-sell work. While that
is a good motivation, the purpose of doing
an inspection every time is to breed the
customer’s expectation.
Customers need to recognize that you don’t
just pull out this 27-point form when it is
time to sell them something. The inspection
forms become so much more credible when
the customer has had three previously that
were perfect and now repairs or maintenance
services are being recommended.
Build it and they will come.
Sometimes dealers want more out of their shop
when there just isn’t enough horsepower.
Contributing to this lack of capacity is the
fact that fi xed operations aren’t so fi xed
A U T O M O B I L E
any more. In a real sense, the service business is getting every bit as variable as the
front end. When you see the technicians
standing around at 3 o’clock, your heart
goes out to them – and it should.
Here is the thing – you never know how
busy you could be with limited resources
and hours to sell. You cannot chop off the
top of production capacity and expect to
retain a bottom line. With a few exceptions,
when in doubt expand your technician pool
– especially at the shallow-end. Don’t think
about it, just do it.
Cut the time or reduce the skill level.
The key to maintaining gross profits is
to match a job with the correct skill level
technician. Having ‘A’ techs performing oil
changes and tire rotations is a quick path to
losing money (unless you have a franchise or
customer base that is unswayed by competitive pricing pressures).
SPRING 2007
things you
should know
about performing
a parts mark-up
survey

Do a down and dirty analysis by comparing your
dealerships retail parts gross profit percentage
and your warranty parts gross profit to get a rough
idea of the potential money at stake. Generally,
the mark-up will come in higher than your average retail pricing.

Set aside a minimum of 30 hours to complete
the survey. It is a tedious and time-consuming
process, but to do it right you have to invest the
man-hours. Otherwise, it will become frustrating
as your requests are denied for clerical errors in
the survey.

The days of being able to afford to pay technicians 300%+ efficiency on “gravy” jobs are
over. All that does is expand the technician’s
pay while the dealership ends up with low
grossing work. If the technician can be super efficient and you maintain a respectable
gross – great. But there is no sense giving
away gross on what should be profitable
work. For instance, are you paying an hour
flat rate for a coolant flush? What are your
local peers paying? What is a reasonable
time and efficiency to pay?
Now with all of that in mind, stop and take a
deep breath and figure out how you are going
to get there. All it takes is an investment in
time and effort.
1,500 repair orders to find 100 repair orders that are
eligible for establishing your retail mark-up.

Each manufacturer has adopted slightly different
rules about what they will and will not allow under
the survey.

To account for the possibility that some repair
orders will be judged unacceptable for the consideration, do several extra as back-ups.

After you complete the survey, look for pricing exceptions and extreme discounts. Are prices being adjusted without the knowledge of management?

Since you are spending a great deal of time to
perform the survey, consider adding some extra
time to evaluate your labor rate as well. Again,
the rules vary on the form and structure of making
such a request.
Unless you have experience with submitting for the
higher rate, expect roadblocks and that your first
request will be picked apart and possibly denied.
¡
To the best of our knowledge, no dealer has been
specifically penalized for requesting the legal markup. Harassed and threatened, yes; harmed, no.
¢
The factory has 30 days to acknowledge and
approve or deny your request. The denial must
include specific reasons for the refusal.
Depending on your dealership’s structure, you will
normally need to review, by hand, between 1,000-
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D E A L E R S
22
* By Invitation Only
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Sunday, June 17, 2007
Arrivals/Registration
1:00 pm - 4:00 pm Check In Party
7:00 pm - 8:30 pm Welcome to Florida Reception
Monday, June 18, 2007
7:00 am-1:00 pm
Registration
8:00 am
Breakfast & General Session
Presenter: Mark Nizer, "Nothing Less Than Brilliant"
11:30 am-2:00 pm Missouri Board of Directors Meeting/Lunch
2:30 pm-4:00 pm
Legislative Advisory Committee Meeting
6:30 pm-11:00 pm Theme Party "Margaritaville"
Tuesday, June 19, 2007
7:00 am-1:00 pm
Registration
8:00 am
Speaker: Ariel Coro, "Flight to Freedom"
9:30 am-11:00 am Franchise Breakout Session(s) Ford, General Motors, Chrysler and Imports (Dealer Only Meeting)
9:45 am-5:00 pm
Shopping Shuttle-Venetian Village/5th Ave/3rd Street South
11:45 am
Golf Putting Contest (Tiburon Golf Course)
12:30 pm
Men & Women’s 4-Person Team Golf Scramble/
Low Gross/Low Net (Tiburon Golf Course)
6:00 pm
TIME
Quality Dealer Selection Committee / Dinner / Meeting
*
Evening open
Wednesday, June 20, 2007
7:00 am-1:00 pm
Registration
8:00 am
Speaker: (TBD)
9:30 am-11:00 am MADA Workers’ Compensation Meeting/Lunch
11:30 am-2:00 pm MADA Charitable Foundation Lunch/Meeting
5:00 pm-10:30 pm Children’s Banquet
7:00 pm-10:00 pm Reception & Dinner
Featured Guest Speaker - Rush Limbaugh
Thursday, June 21, 2007
Day at leisure
8:30 am-11:30 am MADA Executive Committee Breakfast/Meeting
Evening open
Friday, June 22, 2007
Departure Day
Rev. //
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
Increasing
Your Edge
Little Differences That Make
A Big Impact On Profit
By Scott Westfall
Gas prices, employment rates, seasonality, Internet sales, and a
host of forces combine to create a difficult environment to maintain
decent profits while nailing down every possible sale. Following are
three tips to increase your edge and make a big difference on profit:
SPRING 2007
1
Tip 1: Stay with your customers
sion and move on. Likewise, when customers
throughout the sales process.
are interested in test driving a vehicle, they
The attention span of customers has
do not want to stand around while the sales
decreased in proportion to the increase
person runs back to the showroom to ﬁnd the
in technology. Smart-phones, self-scanning at
vehicle keys. An electronic KeyBox system al-
the grocery store, and other technological ad-
lows the salesperson to stay with the customer
vances have led to consumers who want quick
while they select the vehicle they want to see
answers so they can make their purchase deci-
and test drive. Getting customers into a car
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24
quickly can make the difference between making or losing a sale. The extra attention means
customers stay on the lot to ﬁnd a vehicle they
like, increasing the potential for more sales.
2
Tip 2: Improve inventory management by knowing when to
change up vehicles with little
activity. Everyone knows that
vehicles that sit on the lot without much
activity cost money and take up valuable
space. The trick is to know when to move
them to a different location, set a special
price, or take them to the auction. Look for
a system that can provide automated reports
on vehicles that reached a designated age
and/or have less than a desired number of
sales demos. Combined, this information
becomes a powerful tool to determine the
optimal time to remove a vehicle from the
lot. For example, a vehicle that has been on
the lot for 20 days with a high number of
demos should be inspected to determine if
something is wrong with the vehicle. On the
other hand, it may be time to take an older
vehicle with few demos to the auction.
3
Tip 3: Move vehicles quickly
with fewer employees. Various
events in a month often require
moving multiple vehicles quickly
– to pull a desired vehicle for a test drive,
to relocate vehicles for a remote sale, or to
shuffle vehicles while removing snow from
a lot. Such activities use valuable time and
personnel, resulting in increased operational costs. A decentralized key control
system allows you to quickly move each
vehicle as needed.
Increasi ng your edge comes dow n to
knowing how to meet your customers’
needs and that means providing attentive,
fast service.
Scott Westfall is the Director of Sales at GE Security,
a provider of key control systems for thousands of
dealerships nationwide. Scott can be contact at
(800)547-0252, scott.westfall@ge.com or www.
keyadvantage.com.
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
MADA STAFF DIRECTORY
MADA 573.634.3011
Sam Barbee (President & CEO) sbarbee@mada.com .................ext. 141
Rich Echols (Missouri AYES Mgr.) rechols@mada.com .................ext. 173
Maida Graham (Admin. Assistant to CEO) mgraham@mada.com ...ext. 129
Donna Hatfield (Accounting Dir.) dhatfield@mada.com ...............ext. 142
Russ Howser (Membership Services) rhowser@mada.com ...........ext. 171
Scott Loethen (Web/Graphic Design Spec.) sloethen@mada.com....ext. 134
Rosella Reinkemeyer (Office Mgr.) rreinkemeyer@mada.com .ext. 130
Johnny Richardson (Legal Counsel) johnnyr@brydonlaw.com.. 573.635.7166
Phil Schnieders (Director of Leg. Affairs) pschnieders@mada.com ...ext. 123
WORKERS’ COMP. 573.761.1001
Laura Baur (Sr. Claims Specialist) lbaur@mada.com .....................ext. 169
Marilyn Curtit (Admin. Assistant) mcurtit@mada.com ...................ext. 164
Michael Fischer (Risk Control Specialist) mfischer@mada.com......ext. 174
Tonya Geldner (Claims Specialist) tgeldner@mada.com ..............ext. 143
Yvonne Hoerschgen (Medical Only Adj.) yhoerschgen@mada.com ....ext. 131
Sherri Hunger (Fund Mgr.) shunger@mada.com ......................ext. 136
Robin Mitchell (Sr. Claims Specialist) rmitchell@mada.com ...........ext. 132
Marlin Parrott (Sr. Risk Control Specialist) mparrott@mada.com ......ext. 165
Barbara Register (Clerical Assistant) bregister@mada.com .........ext. 153
TITLE SERVICE 573.761.1010
Carla Armstrong (Title Assistant) carmstrong@mada.com ..........ext. 158
Debbie Bowen (Title Service Mgr.) dbowen@mada.com ..............ext. 137
Juanita Graham (Title Assistant) jgraham@mada.com ...............ext. 138
Judy Hale (Title Assistant) jhale@mada.com...............................ext. 170
FORMS DEPT. 573.761.1020
Randy Case (Sr. Field Service Rep.) rcase@mada.com .................ext. 162
Kenny Fry (Printer/Maintenance Tech.) kfry@mada.com...................ext. 135
Cathy Imsland (Administrator) cimsland@mada.com .................ext. 120
Bill Siebeneck (Sr. Printer) bsiebeneck@mada.com .................ext. 175
Doug Smith (Director of Member Services) dsmith@mada.com.........ext. 172
MADA WORKERS’ COMPENSATION
P.O. Box 1279, 3322 American Ave.
Jefferson City, MO 65102 (65109 for deliveries)
PH. 573.761.1001 .................................................... FAX 573.634.5187
MISSOURI AUTOMOBILE DEALERS ASSN.
PH. 573.634.3011 .................................................... FAX 573.636.5834
MADA TITLE SERVICE
PH. 573.761.1010 .................................................... FAX 573.634.5693
MADA FORMS
SPRING 2007
PH. 573.761.1020 .................................................... FAX 573.634.7033
25
T H E
M I S S O U R I
A U T O M O B I L E
D E A L E R S
MADA Advertiser Index
Spring 2007
Accounting
BKD,LLP ................................................................ Inside Front Cover
Davis, Keller & Wiggins, LLC ................................................. Page 11
Attorney
Brydon, Swearengen & England ..........................................Page 15
Banking/Finance
Harris ........................................................................................Page 19
Business Forms
Golden Business Forms ......................................................... Page 17
Credit Card Processing/Check Guarantee
Global Payments, Inc..............................................................Page 25
Certified Public Accountants and Consultants
Davis Keller & Wiggins, LLC .................................................. Page 11
Customer Relationship Management
The Higher Gear Group, Inc. ................................ Inside Back Cover
Documents/Dealer Management Systems
Reynolds & Reynolds ................................................................Page 9
Financial Planning
Protective.................................................................................Page 21
F&I Training/Products
JM&A Group ..............................................................................Page 5
Insurance
JM&A Group ..............................................................................Page 5
Protective.................................................................................Page 21
Sentry Insurance .....................................................................Page 26
Zurich American Insurance Company ....................................Page 3
Wallstreet Insurance Group ..................................................Page 19
New/Used Car Advertising
AutoTrader.com .........................................................................Page 7
Office Supplies
Office Max..................................................................................Page 9
Sales Force/Sales Mgt. Training
Meridian Marketing ...........................................Outside Back Cover
Training
SPRING 2007
JM&A Group ..............................................................................Page 5
www.mada.com
26