Appeals court setback on Obamacare could
curtail impending employer mandate
The much publicized decision about the Affordable Care Act by the U.S. Court of Appeals for the District of Columbia last week, could mean that employers in Virginia, along with employers in surrounding states with employees who live in Virginia, will no longer be penalized for failing to provide health insurance to their employees. The same holds true for states like Virginia, which opted not to create ACA state healthcare exchanges. This will only result, of course, if the DC Circuit decision stands after the legal challenge that is likely coming.
By way of background, the employer mandate section of the ACA provides that employers with 50 or more employees must offer health insurance to their employees. But if they offer it and it is too expensive for the employee - more than 9.5 percent of the individual's income - then the employee is eligible to get a preimum subsidy through the health care exchange. Currently, more than 85 percent of those buying insurance through the exchanges receive a federal subsidy to help pay for it.
Attacks on franchise system and dealer financing
top dealer assns. agenda at summer meeting
Senior executives from auto dealer associations across the U.S. and Canada, which comprise the Automotive Trade Associations network (ATAE), met last week on the West Coast to sort out industry issues before Congress, state legislatures and between dealers and automakers.
High on the list of government relations and industry concerns for the dealer association representatives was the ongoing assault on state dealer licensing laws by high end, electric car maker Tesla, and the media fallout it has caused calling into question the relative utility and public interest of the franchise system. While the overall impact of Tesla sales in the industry is small, the continuing media flurry stirred up by the company's flamboyant owner, Elon Musk, in furtherance of his agenda that Tesla be dealerless, remains bothersome.
Daniel Jobe, Capitol Cadillac, places in "Great Race"
with vintage car
Event marks Capitol's 80th year in business
In celebration of Capitol Cadillac Company's 80th anniversary, dealer Daniel Jobe drove in this year's Great Race from Maine to Florida. Driving a 1946 Cadillac Series 62 convertible 2,400 miles, Jobe and his team finished third out of 39 entries in the Rookie Division.
The Great Race is an eight-day journey of vintage cars 1972 or older on public roads and is described by organizers as a "competitive controlled-speed speed endurance road rally." Instructions are given for each turn, speed change, stop and start, usually 220 to 250 of them a day. The course has four to seven checkpoints, and the goal is to arrive at each one at the correct time, not the fastest.
Congratulations to Daniel Jobe, his navigator David Prueitt and third teammate Brian Love.
O'Donnell officially becomes WANADA CEO this week
For the first time in 32 years, WANADA has a new chief of staff. Effective Tuesday of this week, July 1, 2014, John P. O'Donnell officially became president & CEO of the Washington Area New Automobile Dealers Association taking over from Gerard N. Murphy, who held the post since 1982.
"To be sure, I'm new as chief of staff here at WANADA, but I'm anything but new to WANADA or its staff," President O'Donnell said, referring to his 13 year tenure as a WANADA executive and an earlier business relationship with the WANADA dealer organization that antedates that experience by an additional 10 years.
Employers cannot use pre-tax payroll deductions to fund employee health coverage they don't sponsor
According to the IRS, the only acceptable way to take payroll deductions from staff on a pre-tax basis for health coverage is when it goes to fund the employer sponsored health plan. The Affordable Care Act (ACA) does not permit employers doing pre-tax payroll deductions on health care coverage funding for employees with coverage outside the company's health care plan; either by funding it through an outside vendor, or returning it in cash to the employee for him or her to do so.
NADA presents value of franchised system to the media
In an effort to defeat attacks on the dealer franchise system by Tesla's Elon Musk and Federal Trade Commission officials, NADA has launched a media campaign showing the benefits of the current way of selling cars.
As part of the campaign, the NADA is showcasing a report it commissioned on the consumer benefits of the franchise system by none other than Maryann Keller, longtime Wall Street analyst and now managing partner of Maryann Keller & Associates LLC. "The consumer benefits of an independently owned franchise system arise not only from each dealer's ability to support the elements of every car purchase beyond simply determining the purchase price, but also from the fact that national franchise networks foster competition and therefore ensure fair market pricing in new and used cars and with service," the report says.
Sunshine and blue, cloudless skies greet dealer group golfers
2014 WANADA Open, Lakewood Country Club, Mon., June 16
"I've officiated my share of shotgun starts for WANADA Outings over the years, but never has God delivered any better golf weather than now," longtime CEO Gerard Murphy (right)
told soon-to-be tournament players queuing up in carts to seize the day.
Indeed, Lakewood Country Club in Rockville, Md., the site of the 2014 WANADA Open, provided the ideal setting for a day of friendly competition among Washington area auto dealers and allied industry representatives who took advantage of the opportunity to catch up with colleagues while networking and sharing unforgettable golf moments.
Click here for pictures.
A Special Thank You to Our 2014 Sponsors
ABC7/News Channel 8
BB&T Dealer Financial Services
BMO Harris Bank
Capital One Auto Finance
CareFirst BlueCross BlueShield
Charapp & Weiss, LLP
Chesapeake Contracting Group
Chesapeake Employers Insurance
Chesapeake Petroleum & Supply
Councilor, Buchanan & Mitchell, PC
Group Benefit Services
Hamilton and Hamilton
Penney Design Group
PNC Dealer Finance
RBC Wealth Management, Paul and John Keats
SunDun Office Refreshments
The Washington Post
US Trust/Bank of America Private Wealth Management
Wells Fargo Dealer Services
WorkForce Tactix, Inc.
Bank of America becomes WANADA's first Kindred-line member to donate a grant to dealer career ed.
WANADA salutes US Trust/Bank of America Private Wealth Management for stepping forward with funding for the Automobile Dealer Education Institute's Technician Development Program, thereby becoming the first Kindred-line member in the association to do so. Kindred-line representative John Devine presented a generous donation to ADEI this week at WANADA headquarters in a check for $10,000 from the BoA Charitable Foundation. Devine personally organized the grant pursuant to his leadership position on the board of the Montgomery Students Automotive Trades Foundation where he serves with WANADA dealers and other county business leaders in overseeing the award-winning MCPS Mini Dealership that trains and motivates public high school students toward careers in auto technology and body repair.
Evening marking the transition to WANADA's next CEO
evokes 82 years of Washington auto business memories
Historical fact: The new car dealer association in Washington began in DC almost 100 years ago. The first chief executive officer, however, didn't come on board until 1932, or 82 years ago, and his name was Richard Murphy. In the 1920s, Dick Murphy was one of a number of successful auto dealers in the City of Washington, who, along with his dealer colleagues, was a member of the Washington Automotive Trade Association, the forerunner group to today's Washington Area New Automobile Dealers Association (WANADA).
These were but several of scores of factoids presented, discussed and bandied about over cocktails and dinner on May 29, 2014 at the newly opened Marriott Marquis to mark the occasion of the Passing of the Key to the WANADA office from the association's current CEO of 30 plus years, Gerard Murphy, to his successor, John O'Donnell.
WANADA dealers turn out for fair credit briefing
Regulatory overreach by Feds raises prospect of legal actions
WANADA dealer principals and finance and insurance directors came together last week to gain a full understanding of where the highly publicized assault on the automobile business by the newly established Consumer Financial Protection Bureau is headed with its claims that dealers discriminate against
minorities in arranging credit for car buyers. The charges by CFPB, which began in earnest last year, are curious as they are troublesome. Curious, with the new regulatory agency -- created pursuant to President Obama's signature Finance Reform law -- not having any direct jurisdiction over auto dealers. Troublesome, because the CFPB is working to impact the automobile business by pressuring the financial institutions it does regulate to modify their business relationships with dealers.
Washington Auto Show reps visit OEMs at LA offices
While others are planning summer vacations, WANADA remains hard at work organizing the 2015 Washington Auto Show which begins with OEM exhibitor relations. Toward that end, WANADA's Auto Show Committee and show producer staff take care each year that OEMs understand Washington's Public Policy Auto Show mission, no less than the importance of being properly represented at the show that each year rolls out to one of the strongest, most affluent and reliable automotive markets in the world. Besides interacting with OEMs at other major auto shows, WANADA representatives visit them at their offices, which occurred most recently in Los Angles where a WAS producer team led by Auto Show Chairman Kevin Reilly traveled to see OEM executives at Honda, Acura, Toyota, Lexus and Hyundai.
We are acquainting them with our new plans and programs for Washington's Auto Show in 2015 and beyond, said Reilly. It was great to meet with these OEMs on their home turf where you can really get things done.
Va. DOT chief testifies on Hill about need for highway funds
All eyes in the transportation community are on Congressional efforts to pass a federal transportation bill and replenish the Highway Trust Fund, which is projected to run out of money as early as August. Virginia's Transportation Secretary Aubrey Layne, Jr., testified before the Senate Finance Committee about the urgent need for federal funding for highways and bridges. U.S. Transportation Secretary Anthony Foxx warned that DOT would have to stop payments to states and 700,000 construction jobs would be lost if Congress didn't appropriate money for the Highway Trust Fund. A committee in the House of Representatives passed a transportation bill, and a Senate committee chair promises a bill this week.
While states like Virginia are stepping up and raising revenues, states can only do but so much, Layne told the Senate Finance Committee. Although 60 percent of the state's Transportation Trust Fund is dedicated to highway construction and capital repair, money from the federal Highway Trust Fund has helped pay for the I-95 Express Lanes and the Dulles Rail Project. If the Trust Fund is not fortified for 2015, said Layne, 149 bridge replacements would be stopped and 350 other projects would grind to a halt, affecting more than 43,000 jobs in Virginia and across the nation.
Evening to mark WANADA CEO transition
and spotlight DC area auto business
Thursday, May 29, New Marriott Marquis/Convention Center
WANADA's members along with other industry and community leaders, have been invited to celebrate 70 years of the automobile business in Washington when the association will mark the occasion of Gerard Murphy stepping out as WANADA's president and CEO on May 29, 2014 at the newly opened Marriott Marquis Hotel adjacent to the Washington Convention Center in downtown DC. Seventy years comes from the legacy Gerry Murphy has carried forward at WANADA in successively following his father, Mike, and grandfather, Richard, as CEO of WANADA. Besides the program commemorating the Washington area auto business, a dance band will perform for those so inclined. The current Murphy, whose tenure as chief executive officer at WANADA goes back to 1983, officially passes the keys to the office on July 1st to John O'Donnell who has been the organization's executive vice president since 2006.
Dinner set to mark CEO transition at WANADA
Thursday, May 29, New Marriott Marquis/Convention Center
WANADA's members along with other industry and community leaders, have been invited to celebrate 70 years of the automobile business in Washington when the association will mark the occasion of Gerard Murphy stepping out as its president and CEO on Thursday, May 29, 2014 at the newly opened Marriott Marquis Hotel adjacent to the Washington Convention Center in downtown DC. Seventy years comes from the legacy Gerry Murphy has carried forward at WANADA in successively following his father, Mike, and grandfather, Richard, as CEO of WANADA.
The current Murphy, whose tenure as chief of staff at WANADA goes back to 1983, officially passes the keys to the office July 1st to John O'Donnell who has been the organization's executive vice president since 2006.
NADA chairman defends franchise
system at Automotive Forum
In the wake of national publicity over Tesla's efforts to go around state franchise laws, NADA Chairman Forrest McConnell explained last week why the dealer franchise system is vital to the auto industry. He spoke at the 2014 Automotive Forum, presented by NADA and J.D. Power during the media days for the New York Auto Show.
Dealers helped pave the way for startup brands such as Honda and Toyota, McConnell said. Manning the pivotal retail position, dealers are as invaluable as they are indispensable to automobile business stakeholders, especially consumers. The franchise system keeps competition up and costs down for car buyers, said McConnell, a Honda/Acura dealer in Montgomery, Alabama.
Addressing an issue frequently raised by Tesla proponents in the media, McConnell asserted that, cutting out dealers would not lower car prices, because a factory-owned retail network would have to put in the same investment in physical assets and the same operating expenses that dealers now shoulder.
Virginia budget standoff over Medicaid
shows no sign of abating
Will the Virginia government shut down with the start of the fiscal year drawing near on July 1, as the federal government did? Both Republicans and Democrats are using that threat as they stick to their respective positions on Medicaid expansion. Governor Terry McAuliffe has made expansion of the health care program his signature issue. Republicans say that although the federal government is slated to pay the program's future costs, they believe the feds will back off that guarantee and Virginia will be stuck with the tab.
In a compromise of sorts, the state Senate passed a bill that expands Medicaid eligibility through Marketplace Virginia, which uses federal money to provide private insurance to low-income residents, reports the Associated Press. Participants must pay up to 5 percent of their income to buy insurance through the program.
Warranty reimbursement assurance passes Md. Legislature
Phased-in minimum wage increase approved for the state
With the Maryland General Assembly concluding its 2014 legislative session this week, dealers statewide gained helpful warranty reimbursement protection from automaker franchisors which skirt the existing requirement to pay retail for warranty repairs dealers perform for them. The legislation -- which passed in The General Assembly thanks to MADA with WANADA's support -- establishes a definitive time allowance on labor and a parts markup based upon a retail repair order history designed to compel all automakers to fully comply with the law on reimbursement to dealers. The legislation also includes provisions prohibiting automakers from requiring dealers to use the automakers vendors and contractors when dealers are striving to come into line with automaker facility upgrades and program implementation, such as website design. This second generation warranty reimbursement law will take effect October 1 when the governor signs the legislation in the next few weeks.
Dealers and Tesla come to terms in NY
and Ohio while other states review options
New York Governor Andrew Cuomo announced an agreement late last week between Tesla and the two state dealer associations that was praised by all parties. Tesla will keep the five stores it already has in New York, and additional Tesla retail locations will be established under a strengthened dealer franchise law.
This agreement will serve as a model for other states as they consider how to accommodate Tesla and a distribution system that has served the public well, said Lou Roberti, chairman of the New York State Automobile Dealers Association.
Neale Kuperman, chairman of the Greater New York Automobile Dealers Association added, This reaffirms the state's longstanding goal that cars sold through the dealer franchise system serve the consumer and their best interests.
Ohio dealers fight Tesla; bill allowing
direct sales moves in Ariz.
As predicted, Tesla Motors CEO Elon Musk has far from given up his fight for direct sales in various states. The battle has recently moved to legislatures in Ohio and Arizona. In the meantime, Tesla is dangling the promise of a $5 billion battery production plant, that could employ up to 6,500 people, to be located in a Sunbelt state. Arizona, Nevada, New Mexico and Texas are competing to host the factory. Texas has banned Tesla's direct sales model, Arizona is considering allowing it. As for the other two, who knows?
In Ohio, the Bureau of Motor Vehicles has issued a license to Tesla allowing it to open direct-sales stores in Cincinnati and Columbus. Joe Cannon, a lobbyist for the Ohio Automobile Dealers Association, told legislators the decision means the state's franchise rules have been thrown upside down, reports the Associated Press.
New Jersey aligns with other states,
denying Tesla's bid to retail cars directly
The New Jersey Motor Vehicle Commission last week denied Tesla's most recent attempt to persuade state regulators that it should be allowed to retail its vehicles without dealers, despite auto retailing laws there to the contrary. The Motor Vehicle Commission told Tesla it may no longer sell cars from its two retail locations after April 1.
In so doing, New Jersey joins Maryland, Arizona and Texas, which earlier had rejected Tesla's automaker retail model that operates by selling new vehicles directly to the consumer without a dealer or retail dealer network, which is called for by a number of state motor vehicle licensing laws. Tesla's response, through its outspoken CEO, Elon Musk, was swift and predictable, accusing Governor Chris Christie of setting up a backroom arrangement with auto dealers.
Here we go again with Tesla and its media blitz
NADA to respond to Post editorial slamming dealers
Just when everyone thought Elon Musk's one man crusade to exempt his Tesla EV sales from state auto retail licensing laws had gone away, alas it's back. Washington Post editorial writer Charles Lane's write-up in last Thursday's Washington Post confirms it (Tesla vs. the dealerships, Mar. 13). Curiously, TWP editorialist Lane disavows anything positive about Musk's high-end, electric sports cars -- which he condemns principally for being government subsidized. But there's one place where Tesla stands on the side of the free market angels, and that's in the company's business plan …for selling cars directly to consumers, rather than through auto dealers which Lane sees as nothing more than a costly, outmoded monopoly on new car sales in the U.S.
Strong Washington area sales got even
stronger in 2013, up 2.6%
Washington area auto sales never experienced the effects of the recession as much as the rest of the nation. So 2013 sales here reflected modest gains in an already robust market. Sales for the year rose 2.6 percent, which included a small dip in the fourth quarter. U.S. sales, by contrast, were up 7.5 percent for the year and 6 percent for the quarter. But, here again, they had much farther to climb. Washington area figures for 2013 are from WANADA's Area Report, based on R.L. Polk new-vehicle registration data. U.S. sales figures are from NADA and Ward's Automotive.
2014's top legal trends for dealers:
regulation, franchise demands
The year's top legal trends for dealers, compiled annually by attorney Eric L. Chase of Bressler, Amery & Ross, Florham Park,NJ, bring good news & bad news. In the bad news column for dealers and the private sector generally, 2014 will be what Chase calls the high water mark of regulatory activity.
The regulatory elephant in the room, of course, is the Affordable Care Act. The regulations are extremely complex and problematic, as much so as ACA's dysfunctional rollout. As of late 2013, says Chase, those regulatory pages totaled 30 times the pages of the actual legislation. Other regulatory thickets that are more dealer-specific will continue to come from the Consumer Financial Protection Bureau, the EPA and the FTC. The FTC is likely to act against dealer advertising practices where regulators find deceptive price quotes; and spot delivery, where delivery occurs before financing is final.
Vice President Biden treats family to hometown Auto Show
Joe Biden: I'm a car guy!
The phone call came into the Washington Auto Show office Saturday afternoon, Feb. 1, on the show's final weekend, that the vice president was coming by for a visit. Within an hour of that phone call, Joe Biden, Dad and Granddad, arrived at the show with his sons and grandchildren. And, but for the extensive Secret Service detail that came, too, the vice president was like any other local visitor enjoying Saturday afternoon at the Auto Show with his boys, albeit son Beau Biden is attorney general for Delaware.
It all happened so fast, without notice or fanfare, the likes of which we had year before last when President Obama toured the show, said Auto Show manager Bob Yoffe, who got the phone call and handled the logistics with the Secret Service.
NADA dealers upbeat in New Orleans amid upbeat auto sales
In some ways, the 2014 NADA/ATD Convention was almost like old times, back in New Orleans with auto sales likely to return to pre-recession levels this year in an improving economy. Attendance to the Convention was robust, too, at 22,000. Unlike the old days, there's a female president at the head of General Motors, Mary Barra, who was First Lady Michelle Obama's guest at the State of the Union address recently. And although it's not unusual to hear a major political figure speak at the Convention, there have been few women or Democrats. Hillary Clinton was a controversial choice when first announced, but her hour long speech appeared to be well received by dealers.
Snow in Washington doesn't slow Auto Show Preview
Media mingle with operatives from
industry, Congress, agencies
Despite snowy streets and sidewalks, closed schools and delayed office openings early last week, Washington's 2014 Auto Show Media and Industry Preview commenced as scheduled on Jan. 22. And even though planned activities for the day before had to be rescheduled, there was no setback for the Preview with the Walter E. Washington Convention Center filled with reporters & automaker operatives. (Left: Kevin Reilly, WAS Chairman, opens the Media Preview Day).[FULL ARTICLE]
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Hot on the heels of Detroit's Auto Show preview, Washington is
poised to preview and open its Auto Show here next week
Past success bodes well for Washington the Public Policy Show
and the Consumer Show
This year's Washington Auto Show follows the North American International Auto Show which previewed this week in Detroit. Specifically, Washington's Auto Show for 2014 previews next Tues. and Wed., Jan. 21-22, opening to the public Thurs., Jan. 23 and running until Sun., Feb. 2. The 2014 WAS follows the milestone Auto Show from last year that turned out the highest attendance ever in WANADA's 97 year span. [FULL ARTICLE]
Sec. of Energy to join Ford COO Mark Fields
as keynoter on WAS Media Day, Jan. 22
Media Day at the 2014 Washington Auto Show has been rounded out with confirmation of the second keynote presenter, Dr. Ernest Moniz, the Secretary of Energy. Sec. Moniz will be the U.S. government keynoter in the morning slot at 10:20 a.m. The OEM keynoter is Ford Motor Company COO Mark Fields, who will headline the Newsmaker Breakfast, co-sponsored by the International Media Press Association and the Washington Automotive Press Association. [FULL ARTICLE]
WANADA ADEI Tech Development Program earns
The Auto Technician Development Program of WANADA's Automobile Dealer Education Institute (ADEI) has earned a five-year renewal of its Master Automobile Service Technology Accreditation. That is the highest level of achievement recognized by the National Automotive Technician Education Foundation (NATEF), the educational arm of ASE, the National Institute for Automotive Service Excellence. It's quite an accomplishment, says Steve Boden WANADA's educational curriculum advisor on ADEI programing who is also executive vice president of the Automotive Trades Foundation. ATF is the partnership between
Montgomery County Public Schools and the local business community, including WANADA, that trains high school students by having them man a licensed used-car dealership. [FULL ARTICLE]
2014 Washington Auto Show Preview Days coming into focus
Industry/Media Preview, Jan. 21-22;
Public Days Jan. 23- Feb. 2
With 2014 and the Auto Show in Washington coming up next month, WANADA dealers, OEM executives, U.S. lawmakers and the press are looking ahead to Industry/Media Days that will be a week and a day earlier than in 2013. What follows is an outline of what's on tap, especially for the information of WANADA dealers, with more in the pipeline to be reported shortly. [FULL ARTICLE]
Ally Financial settlement with U.S. on auto loan
discrimination signals more regulatory reprisals
Action gives wing to CFPB charge that banks and dealers
rate minorities higher
Last weekend's announcement that Ally Financial settled with the federal government for $98 million triggered statements from the highest levels of the Obama Administration, starting with Attorney General Eric Holder who described it as the largest settlement ever in an auto loan discrimination case, followed by CFPB Director Richard Cordray's promise to return $80 of the $98 million to the hard working consumers who paid more for their cars and trucks based on their race and national origin. The remaining $18 million of the $98 million payout from Ally will go to the Consumer Finance Protection Bureau's civil penalty fund. [FULL ARTICLE]
2014 Washington Auto Show
Public Policy Day & Preview, Wed., Jan. 22
Ford COO Mark Fields to kick off 2014 Washington Auto Show
Mark Fields, chief operating officer of Ford Motor Co., will deliver the keynote address at the 2014 Washington Auto Show's Newsmaker Breakfast Wed., Jan. 22. The breakfast, cosponsored by the Washington Automotive Press Association and the International Motor Press Association, is part of the Show's Public Policy Day Preview.