Vol. 35 № 2 A Publication of the Illinois Automobile Dealers Association Automobile Dealer News THE 5 CS of Attractive Leadership
Memberships in: • AUTOCPA Group • The American Institute of Certified Public Accountants • The Illinois CPA Society CERTIFIED PUBLIC ACCOUNTANTS Located in Central Illinois, we serve the entire state. Contact us today to learn how we can help your dealership thrive. Drive Your Dealership Toward Financial Success We specialize in automobile dealers in the following areas: • Dealership valuations • Automobile dealer legal support • Buy-Sells for dealerships • LIFO inventory computations • Financial statement analysis • Corporation Income Tax returns • Personal Income Tax returns • CPA prepared financial statements • Dealer estate planning • Employee theft consulting • Internal control studies and audits • Profit consulting • Training office managers/CFO’s • 401K Audits Serving more than 250 Automobile Dealers throughout the United States (309) 662-8797 Email: woodwardassoc@cpaauto.com Website: www.cpaauto.com 1707 Clearwater Avenue P.O. Box 1584 ·Bloomington, IL 61702
CONCENTRATIONS Dealership Mergers & Acquisitions Dealership Franchise Law Business Litigation/Motor Vehicle Review Board Disputes Manufacturer/Franchisor Relations Business & Commercial Law Advertising Compliance Review Consumer Complaints Dealership Succession Add Points Real Estate Law Employment & Labor Law Federal & State Regulatory Compliance BACKGROUND Principal, Private Law Firm Former, IADA Legal Counsel Former, Illinois Assistant Attorney General, Deputy Chief, Consumer Protection Division Drafted Illinois Motor Vehicle Franchise Act Amendments Creating Motor Vehicle Review Board Drafted Illinois Motor Vehicle Advertising Regulations Julie A. Cardosi, Esq. 3040 Spring Mill Drive, Suite B Springfield, IL 62704 (217) 787-9782 jcardosi@autocounsel.com www.autocounsel.com Exclusive. Strategic. Results. Exclusively representing the unique business interests of automobile dealers for 38 years.
CONTENTS Vol. 35 No. 2 Chairman John Alfirevich / 708.429.3000 Apple Chevrolet Inc. 8585 W. 159th St., Tinley Park, IL 60477 Vice Chairman Jamie Auffenberg / 618.624.2277 St. Clair Auto Mall Auffenberg Auto Mall 1130 Auffenberg Ave., Shiloh, IL 62269 Secretary/Treasurer Rick Curia / 815.288.4455 Ken Nelson Auto Group 1100 N. Galena Ave., Dixon, IL 61021 Executive Director Joe McMahon / 217.753.0220 Illinois Automobile Dealers Association 300 W. Edwards, Springfield, IL 62704 2024 OFFICERS ©2024 Illinois Automobile Dealer News | The newsLINK Group, LLC. All rights reserved. Illinois Automobile Dealer News is published four times each year by The newsLINK Group, LLC for the Illinois Automobile Dealers Association (IADA) and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the IADA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Illinois Automobile Dealer News is a collective work, and as such, some articles are submitted by authors who are independent of the IADA. While the Illinois Automobile Dealer News encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at: 855.747.4003. Illinois Automobile Dealers Association 300 W. Edwards St. Springfield, IL 62704 T 217.753.0220 / F 217.753.3424 IllinoisDealers.com 12 Scan here to check out the new, interactive IllinoisDealers.com website! 6 EXECUTIVE DIRECTOR’S MESSAGE Fighting for the Illinois Franchise Dealer Model By Joe McMahon, Executive Director, IADA 10 COUNSELOR’S CORNER Federal Trade Commission to Institute Ban on Non-Compete Agreements By Julie Cardosi, Esq., Law Office of Julie A. Cardosi, P.C. 12 Right of First Refusal Dispute Reinforcing the Importance of the Motor Vehicle Review Board 16 The 5 Cs of Attractive Leadership By Tim Marbut, Ethos Group 18 Driving Illinois’ Economy 20 Ransomware Costs Businesses Record-High $1 Billion in 2023 Your 5-Step Plan to Prevent Attacks in 2024 By Fisher Phillips 16 4 Illinois Automobile Dealer News
A Better Core in 2024 DominionDMS.com (866) 928-3210 1515 South Federal Highway, Suite 406 Boca Raton, FL 33432, USA SCHEDULE YOUR DEMO Discover how VUE By Dominion DMS gives your dealership: Hearing the cries of the automotive community, we developed a brand new cloud core DMS, called VUE. This software is flexible, efficient and innovative. Schedule a demo and upgrade to a Better Core in 2024. EFFICIENCY INNOVATION FLEXIBILITY SAVINGS Personalization, Engagement, and Speed – the holy trinity of an amazing customer experience. Being a cloud-core DMS and using agile development methodologies means that we can keep dishing out top-notch solutions for our dealers and partners. Dominion DMS is easy to learn and simple to use. You have easy access from any web connection and you get to choose the apps you want and need to drive your success. Behold, VUE! Waving a magic wand to make DMS core fees vanish into thin air. Franchise dealerships can now save while still enjoying our best in class accounting, parts, sales, and service modules.
Executive Director’s Message Fighting for the Illinois Franchise Dealer Model An election year always makes for a unique legislative session. Our team is vigilantly monitoring the legislative developments to safeguard our industry’s interests. Currently, IADA is voicing strong opposition to the newly proposed legislation, HB 4629 (Morgan) and SB 3331 (Aquino), in the ongoing debate over so-called “junk fees.” While the intention behind these bills is to elevate the standard of consumer transparency across a wide array of industries, IADA believes they inadvertently disregard the particulars of auto sales and the legitimate role of DOC fees. IADA also supports HB 4589, which seeks to curb catalytic converter thefts. The bill was passed unanimously by the House Judiciary Criminal Committee. It requires buyers of detached catalytic converters to retain additional records, including the VIN number from which the part was removed and requires sellers to provide a copy of the certificate of title or registration showing ownership of the vehicle for which the part was removed. We’ll keep you informed on significant updates and continue to navigate the legislative landscape. In other news, we were excited to host our President Club Appreciation Reception at the Abraham Lincoln Presidential Library on May 6. The event was designed to thank all our dealers who participated at a high level in supporting the legislative efforts of NADA. The event included a reception at the Lincoln Presidential Library followed by a program at the Presidential Museum with the NADA Executive Vice President of Public Policy, Paul Metrey and NADA Chairman, Gary Gilchrist. In appreciation of your loyal support, IADA also hosted an exclusive Vehicle Service Contract workshop brought to you by Ethos Group. The free workshops were held on May 22-23. JOE MCMAHON EXECUTIVE DIRECTOR IADA 6 Illinois Automobile Dealer News
We also continue to offer weekly training seminars and webinars in coordination with our CVR partners. Our IADA-CVR program offers the premier title and registration service to all our members, with our entire staff working on your customers’ daily transactions while working with SOS to further innovate the entire process. Your partnership with IADA on this program and others provides us with the much-needed support needed to represent your interests at the State Capitol. We will never take your support for granted and will always be the association that fights for the Illinois franchise dealer model! 7 Illinois Automobile Dealer News
Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. illinois-auto-dealer-news.thenewslinkgroup.org (801) 676-9722 | (855) 747-4003 | sales@thenewslinkgroup.com CONTACT US TODAY. QR Code: website /#ad-space STRONG? Is Your Marketing Plan Advertise in this magazine and strengthen your business. 8 Illinois Automobile Dealer News
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Brad Bartsch, bradley.w.bartsch@bofa.com Tony Garcia, anton.r.garcia@bofa.com Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. 5949042 12-23-0324 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA. Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Brad Bartsch, bradley.w.bartsch@bofa.com Tony Garcia, anton.r.garcia@bofa.com Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. 5949042 12-23-0324 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
The Federal Trade Commission (FTC) just announced, at the time of this writing, its ban on most noncompetition agreements between employers and workers utilized by businesses throughout the U.S. The new FTC Rule, originally proposed in 2023, is set to become effective 120 days after its publication in the Federal Register, which will depend on the outcome of legal challenges opposing the ban.1 The Rule embodies policy goals of the current U.S. President’s administration and mandates how businesses compete. However, companies utilizing non-compete clauses or agreements advocate that these tools are an effective means to protect trade secrets, intellectual property, and other related confidential information. Typically, in the automotive industry context, a non-compete agreement might be used with dealership personnel, such as sales or F&I staff, to protect proprietary customer and sales-related information and processes. Also, in the context of a dealership buy-sell, non-compete clauses or agreements are utilized to protect the investment of the purchasing dealer. In the face of the pending legal challenges to the Rule, some businesses are assuming a wait-and-see posture while they monitor the legal cases and continue their use of non-compete agreements. Other businesses are also evaluating how they might protect their proprietary interests without non-compete agreements or clauses and are preparing for inevitable effective date and enforceability once the legal wrangling ceases. It’s important for businesses to understand the ban now in the event it goes into effect in the near term. First, as mentioned above, the Rule becomes effective 120 days after publication in the Federal Register which may be delayed depending on the pending lawsuits. The Rule prohibits new non-compete clauses and agreements with all workers, which includes senior executives and also includes independent contractors, volunteers, interns and all persons who work for an employer or contractor. After the effective date of the Rule, such a non-compete clause or agreement will be viewed by the FTC as an “unfair method of competition” and prohibited by the Federal Trade Commission Act, thereby subjecting businesses to possible enforcement actions, civil claims and penalties. For non-compete covenants or agreements existing as of the effective date, only those with senior executives (earning greater than $151,164.00 and working in “policymaking positions”) will be grandfathered or permitted to continue. There is also a business sale exemption in the Rule for noncompete agreements that are entered into as part of a bona fide sale of a business. Business consultants, attorneys and other advisors expect additional legal challenges against the Rule to be lodged, BY JULIE CARDOSI, ESQ. LAW OFFICE OF JULIE A. CARDOSI, P.C. Counselor’s Corner Federal Trade Commission to Institute Ban on NonCompete Agreements 10 Illinois Automobile Dealer News
so it is difficult to state with certainty when the Rule will become effective. However, businesses are urged to evaluate how they will protect company interests in lieu of using non-compete clauses or agreements. Businesses should not wait or necessarily rely on the pending legal challenges to undertake their own due diligence to ensure the lawfulness of their agreements and covenants in place and to protect the proprietary nature of confidential information, trade secrets and intellectual property.2 Companies should review any existing agreements that contain restrictive clauses or provisions and plan for the effective date of the Rule. This might include determining how to protect proprietary information and preparing to comply by changing existing agreements or clauses and by notifying workers who are subject to noncompetition agreements that will be unlawful once the Rule becomes effective. 1. Within 24 hours of the FTC’s adoption of its ban on Apr. 23, 2024, the U.S. Chamber of Commerce and other pro-business groups filed suits in federal court asserting the FTC lacks authority to issue and enforce its blanket noncompete ban as an “unfair method of competition”, citing the absence of a clear mandate from the U.S. Congress. Enforcement of the rule could be delayed well beyond the 120 days, particularly if the cases are appealed down the road. (See Chamber of Commerce et al. v. FTC et al., No. 6:24-cv-148; see also Ryan, LLC v. FTC, No. 3:24cv-986). 2. Certain federal agencies operating under a different set of federal laws have been recently challenging nondisclosure, non-solicitation and confidentiality covenants and agreements as unlawful, separate and apart from the FTC and the new Rule. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for 38 years and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly in-house legal counsel for the Illinois Automobile Dealers Association, she concentrates her private practice in the areas of dealership operations and compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, dealership employment and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1. 11 Illinois Automobile Dealer News
In our Jan. 30, 2024, bulletin, we reported on Mercedes-Benz’s attempt to do an end-around the Motor Vehicle Review Board hearing process created under the Illinois Motor Vehicle Franchise Act. You can view all our IADA bulletins at www.IllinoisDealers.com. In Mercedes-Benz USA LLC v. JP Motors Inc. (2023 U.S. Dist. Lexis 211132), Mercedes-Benz exercised a right of first refusal (ROFR) upon a dealer who was selling a combined Mercedes-Benz/Nissan/Chevrolet store and demanded that the seller apportion the percentage of the selling price that was attributable to the Mercedes franchise. Right of First Refusal Dispute Reinforcing the Importance of the Motor Vehicle Review Board 12 Illinois Automobile Dealer News
The U.S. District Court judge abstained from hearing the case, holding that the dispute was a matter of state law interpretation that should properly be heard by the Illinois Motor Vehicle Review Board to decide. After the dispute was remanded to the board, the matter was litigated, and the hearing officer’s finalized decision provides Illinois dealers with another resounding success. The hearing officer found that the seller’s dealer agreement with Mercedes-Benz that contained Mercedes’ purported ROFR — enabling Mercedes to assume the buyer’s rights and obligations under a proposed buy/sell agreement — had expired at the end of 2012, nine years before the proposed sale. As discussed below, the seller alleged that Mercedes’ refusal to make a final decision about whether to exercise its ROFR until the seller provided an apportionment of the selling price that was attributable to the Mercedes franchise violated multiple provisions of the Illinois Motor Vehicle Franchise Act (Act). For its part, Mercedes asserted that the seller’s refusal to provide an apportionment violated the Mercedes dealer agreement and the Act. The hearing officer’s decision found that Mercedes was not entitled to condition its approval of the sale on receipt of an apportionment for several reasons: • First, the Act does not create a statutory right of first refusal. The Act merely regulates the enforcement of independently created contractual rights of first refusal and prohibits “unreasonable restrictions” on dealership sales. • Second, JP’s written dealer agreement expired at the end of 2012, meaning that Mercedes and the seller were operating under an unwritten agreement. An expired dealer agreement could not create a contractual ROFR, or any other contractual rights, for either party. MercedesBenz failed to provide evidence that the unwritten “arrangement” between Mercedes and the seller included a ROFR. • Third, if the expired written dealer agreement had still been in effect, that agreement did not include a provision that would have required the dealer to apportion its Mercedes franchise in the event of a sale. Without express apportionment right in the dealer agreement, the hearing officer refused to infer one. • Fourth, the Act does not expressly mention a right to an apportionment in any Section of the Act. The absence of an apportionment right in the Act, on its own, defeats Mercedes’ contention that the seller’s refusal to provide an apportionment is a violation of the Act. • Fifth, the Act does not imply a manufacturer right to apportionment and, as a matter of fact, Section 4(e)(14)(B) of the Act requires a manufacturer exercising a ROFR to pay the selling dealer consideration at least equal to “all or substantially all of the dealership assets, stock or other ownership interest, including the purchase or lease of all real property, leasehold or improvements 13 Illinois Automobile Dealer News
related to the transfer or sale of the dealership.” In other words, a manufacturer exercising a right of first refusal must pay the same or greater price as the seller expected for the entire transaction. Section 14(e)(14)(C) bolsters this position by requiring a manufacturer to assume “all of the duties, obligations and liabilities contained in the agreements that were to be assumed by the proposed transferee.” A manufacturer exercising an ROFR cannot assume some of the proposed buyer’s obligations and ignore other obligations. It is impossible to apportion the proposed transaction without dismantling the dealership, which was not the intent of the Act. In addition to holding that Mercedes was not entitled to demand an apportionment as a condition of approving the sale, the hearing officer also found that Mercedes’ apportionment demand violated several provisions in the Motor Vehicle Franchise Act: • Section 7 of the Act prohibits unreasonable restrictions relative to transfer, sale, right of first refusal or option to purchase. Neither the dealer agreement (which was expired anyway) nor the Act require apportionment. Mercedes’ apportionment demand was an unreasonable restriction on the proposed sale that would have prevented the dealer from selling all three of his franchises. • Sections 4(e)(6) and 4(e)(11) prohibit refusal “to give effect to or prevent or attempt to prevent by contract or otherwise any … motor vehicle dealer from selling or transferring any part of the interest in any of them to any other person” without good cause. As soon as Mercedes declared that it would not process the proposed transfer without an apportionment, it committed a violation of Sections 4(e)(6) and 4(e)(11). The hearing officer’s proposed decision rejected Mercedes’ argument that because Mercedes was awaiting the seller’s apportionment before deciding whether to approve the sale, it had not yet rejected the proposed sale. Mercedes could not stall to avoid a violation. • Section 4(b) prohibits a manufacturer from taking action that is “arbitrary, in bad faith or unconscionable and which causes damage to any of the parties or to the public.” The proposed decision held that Mercedes withholding approval of the proposed sale pending an apportionment was unreasonable, arbitrary and in bad faith because: › It demanded a right of first refusal under a contract that had expired nine years prior; › Mercedes’ partial ROFR left the seller with two choices, either of which would have devalued the seller’s investment, canceling the sale or trying to sell Chevy and Nissan franchises to a buyer who wanted Chevy, Nissan AND Mercedes; and › Mercedes’ apportionment demand was merely a pretext for refusing to act on the application — Mercedes had done no evaluation of the proposed buyer. In addition to damaging the seller’s investment in his franchises, the proposed decision found that Mercedes demand for apportionment would harm the general public by eliminating a Mercedes point, forcing customers to travel at least 60 miles to get to the closest point for sales and service and reducing competition for repairs and warranty work. Finally, the proposed decision requires Mercedes to approve the proposed sale. Legislation passed by IADA created the Motor Vehicle Review Board to preside over disputes under the Illinois Motor Vehicle Franchise Act. The board hearing officers have expertise in the act, which is a specialized area of Illinois law, and the creation of the board has provided an efficient means for dealers to seek resolution of Motor Vehicle Franchise Act disputes. This Mercedes-Benz protest is another case in which a dealer has been able to stand up for his statutory rights against overbearing manufacturer actions. In addition to the creation of the Motor Vehicle Review Board, dealer support over the past 104 years has helped IADA pass the Motor Vehicle Franchise Act, Vehicle Code, Sales Tax and other legislation for the benefit of franchised dealers. We will never take your support of IADA for granted! 14 Illinois Automobile Dealer News
F&I PRODUCT TRAINING SPECIAL FINANCE TRAINING COMPLIANCE TRAINING SALES TRAINING CALL US NOW 877.875.6906 30 Two Bridges Rd. Suite 240, Fair eld NJ 07004 • vanguarddealerservices.com OUR DEALERS BENEFIT FROM: Free F&I Specialists/ Emergency Fill-in Better Managed Sales and F&I Departments Low Employee Turnover Compliance Experts Continuous In-House Training Higher CSI Scores and Customer Retention Rates EV Solutions Specialists Ongoing Compliance Staffing Support SCAN ME Free, Confidential, Honest Sales Strategy and Proficiency Analysis FOLLOW US ON OUR SOCIAL NETWORKS
THE 5 CS of Attractive Leadership By Tim Marbut, Ethos Group Of all the leaders you have encountered, who has been the best? Now, who was the worst? Which one was easier to remember? There are a plethora of bad managers and leaders but very few great ones. Often when the topic of leadership arises, we discuss aspects like vision, mission, values and accountability. All these topics are important and essential to the discussion, as they form the backbone of effective leadership. However, the more important topic of discussion might be: Why do people follow someone’s ideas on vision, mission, values and accountability? What qualities make a person worth following? Over the past 30-plus years, I have been a student of human behavior. I am intrigued by things like why certain people excel and why others do not; why certain people lead and why certain people always follow; why we follow certain leaders and not others; and why some leaders have good intentions but fail. There must be some answers to these questions. So, what is it that makes a leader followable or attractive? Five essential components define attractive leaders — those exceptional individuals whom people are naturally inclined to believe in or follow, particularly concerning vision, mission, values and accountability. I call these The 5 Cs of Attractive Leadership: Charisma, Competence, Character, Communication and Compassion.
1. Charisma Charisma is the first and glaring component of attractive leadership. Great leaders have that certain awe, presence or confidence that stands out. They do not have to announce their entrance or position. People are drawn to them and feel confident in their ability to do what they say they can do. They are exciting, confident, enthusiastic, focused and motivated to succeed. Their ability to connect everyone around them to a greater purpose beyond individual interests is one of their most significant attributes. 2. Competence Being competent within your field of endeavor is a major point of separation in a great leader. J.C. Penny once said, “A man should know their business better than anyone else.” A competent leader knows how to ask and answer the right questions. They can anticipate challenges in their business and take preemptive measures to prevent them. Competent leaders understand their team members and know how to bring the best out of them. 3. Character A person’s character is easily demonstrated by how they treat people they do not necessarily rely on or need. Character is one’s core belief system revealed. An attractive leader is one you want to follow because of their influence and moral compass. Character alone can either solidify attractiveness or ruin attractiveness. In an attractive leader, there exists a seamless alignment between their words and actions. 4. Communication One of the most compelling traits of great communicators is their incredible ability to listen first. An attractive leader who is also a great communicator listens for more than just a message, problem or communication point. They listen to messages that are not spoken. They recognize, understand and communicate to one’s unique personality traits. They easily explain expectations and desired behaviors in a way that is understood and respected. 5. Compassion Great leaders care. The question arises: Why would individuals choose to follow someone who lacks genuine care for their well-being and their success? The answer might be found in the concept of fear. There are three primary ways to motivate: fear, incentive and purpose. However, great leaders motivate through purpose, recognizing its enduring impact. Purpose-driven motivation is the most long-lasting motivator because it focuses on the individual, their ideas, desires and contributions to the company or cause. Are You a Leader Worth Following? Great leadership is rare because it revolves around prioritizing the needs, development and success of others over personal gain or recognition. It requires a clear vision, a compelling mission, unwavering adherence to values and a steadfast commitment to accountability. It is important to consider how we lead and how it affects others. Do we inspire trust and help others grow, or do we struggle to give direction and support? Do we exhibit The 5 Cs of Attractive Leadership? We all have a list of the best and worst leaders we have encountered. To what list do you belong? For more information on how Ethos Group can help your dealership develop more leaders in your F&I office, sales management tower and sales floor in 2024, please visit ethosgroup.com. Great leadership is rare because it revolves around prioritizing the needs, development and success of others over personal gain or recognition. 17 Illinois Automobile Dealer News
Source: Bureau of Labor Statistics, Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Census Bureau $3.4B $41.1B 3.5% Includes income taxes paid for direct, indirect and induced jobs. PAYROLL TOTAL SALES (all dealerships) REGISTRATIONS STATE SALES TAX PAID NATIONAL AUTOMOBILE DEALERS ASSOCIATION NADA Industry Analysis | 8484 Westpark Drive, Suite 500, Tysons, VA 22102 | 800.557.6232 | economics@nada.org NADA Legislative Affairs | 412 First St. SE | Washington, DC 20003 | 800.563.5500 | legislative@nada.org 697 DEALERSHIPS (new car) 94,564 TOTAL JOBS (created by dealerships) Includes 42,947 direct jobs and 51,617 indirect and induced jobs. 62 EMPLOYEES (average per dealership) Driving Illinois’ Economy Annual Contribution of Illinois’ New-Car Dealers Numbers reflect annual economic activity during 2023. $78,754 Average Annual Earnings $1.1B State and Federal Income Taxes Paid Illinois’ Share of Total U.S. New-Vehicle Registrations $2.9B 18 Illinois Automobile Dealer News
OUR MIDWEST TEAM GLOBAL OPPORTUNITIES. LOCAL EXPERTISE. GENERATED IN VALUE $7+ BILLION 150+ ROOFTOPS AVAILABLE IN CANADA 425+ DEALERSHIPS SOLD 1700+ DEALERSHIP VALUATIONS 80+ ROOFTOPS AVAILABLE IN THE U.S.A. 50+ ROOFTOPS AVAILABLE IN THE U.K. CONTACT DSMA TODAY. Our clients benefit from unparalleled global exposure for their buy-sell needs. With locally-based associates, we offer customized insights for your business. DSMA connects you with qualified buyers worldwide, cutting transaction time and maximizing ROI. BUY@DSMA.COM +1 833-650-4188 DSMA.COM For more information, or to learn about our 80+ opportunities, visit DSMA.com. MIKE FUNK M&A Associate michael.funk@dsma.com 312.674.4556 JENNIFER RAFAEL Vice President, Partner jennifer.rafael@dsma.com 312.927.9561 JONATHON MORONI Business Dev. Manager jonathon.moroni@dsma.com 312.674.4556 GREG BROWN M&A Associate greg.brown@dsma.com 312.674.4556 CHRIS HAWLEY M&A Associate chris.hawley@dsma.com 312.674.4556 KEVIN CHRIST M&A Associate kevin.christ@dsma.com 312.674.4556 ZACH HICKSON M&A Associate zach.hickson@dsma.com 312.674.4556
Ransomware Costs Businesses RecordHigh $1 Billion in 2023 Your 5-Step Plan to Prevent Attacks in 2024 By Fisher Phillips 2023 was the most devastating year yet for ransomware attacks, with businesses forking over $1 billion in ransom payments for the first time ever — and 2024 is expected to be even worse. Beyond the payments, the average cost of each ransomware attack last year was over $5 million. Given these unprecedented statistics, ransomware attacks could be the largest looming threat to your business in 2024. This insight provides a clear 5-step plan to help you lower the odds of falling prey to a costly attack. The Basics • Ransomware is malicious software that blocks access to computer systems or files until you pay a sum of money to the cybercriminals who have infiltrated your business. They gain access by exploiting system vulnerabilities (sometimes through a third party or vendor that has access to your system) or by luring your employees into clicking on links or attachments or responding to phishing emails or “smishing” texts (phishing through SMS texts). 20 Illinois Automobile Dealer News
• The $1.1 billion tally of ransoms paid in 2023 was particularly shocking because it nearly doubled the $567 million in ransoms paid out in 2022. • Not including the payouts, the average cost of a ransomware attack — including detection and escalation, notification, post-breach response and lost business — rose to $5.13 million in 2023, which represents a 13% increase from 2022. • Federal and international law enforcement have deployed extensive efforts to minimize ransomware attacks on a global scale. In fact, the FBI and UK National Crime Agency made headlines as they implemented “Operation Cronos” and disrupted one of the world’s most potent ransomware attackers. • Despite law enforcement’s efforts to smother these cyber threats, experts project an increase in cyber syndicates in 2024. Allan Liska, threat intelligence analyst at cybersecurity firm Recorded Future, commented, “A major thing we’re seeing is the astronomical growth in the number of threat actors carrying out ransomware attacks.” Recorded Future reported 538 new ransomware variants in 2023. 5-Step Plan for Businesses to Prevent Costly Ransomware Attacks in 2024 1. Provide Updated Cybersecurity Training You should provide updated and robust cybersecurity training to all your employees (including very busy executives) on an annual basis. According to the 2023 Cost of Data Breach Report (CODBR), phishing and compromised credentials were the most common initial attack vectors for data breaches, demonstrating that threat actors still count on a shortfall in employee oversight to gain access to valuable, confidential data. The latest data from the CODBR also suggests that cybersecurity training is a wise investment for employers. In 2023, organizations with a high level of employee training that suffered a data breach incurred a significantly lower-than-average cost in managing and responding to the data breach incident. On average, data breaches cost $770,000 less for organizations with a high level of employee training and $640,000 more for organizations with low levels of employee training. This data underscores the importance of ensuring that all employees with access to sensitive data are familiar with the basic principles of data security. Make sure to train them to understand the red flags that will help them detect phishing emails and other common tactics used to compromise credentials. 21 Illinois Automobile Dealer News
2. Maintain and Test Your Incident Response Plan Create, maintain and exercise a data security incident response plan (which addresses all data security incidents, not just those rising to the level of a reportable data breach under applicable law), resiliency plan and associated communications plan. The response plan should include response and notification procedures for ransomware incidents. You should also ensure that your incident response plan is regularly tested and updated, as cyberthreats are quickly evolving. Engage in what is called a “tabletop exercise” at least annually, which is like a fire drill but for data security. According to the 2023 CODBR, employers who maintained an incident response team and plan were able to identify and contain data breaches an average of 54 days (19.4%) faster than employers who did not maintain an incident response strategy. Lower identification and containment times provably lower the cost of a potential breach, as breaches with identification and containment times under 200 days cost organizations 23% less in 2023 than organizations who took longer to identify and contain data breaches. 3. Implement Artificial Intelligence or Automated Cybersecurity As ransomware gangs continue to rely on new strains of malware and other new technologies to infiltrate valuable data, you should familiarize yourself with the latest defense and detection technologies to develop more proactive cybersecurity systems. For example, using artificial intelligence (AI) and automation across cybersecurity threat detection and response tools can help analysts detect new threats faster and more accurately than ever before. These technologies have already proven effective for employers who fell victim to data breaches in 2023. In fact, the 2023 CODBR found that employers that extensively used AI or automated cybersecurity systems saved nearly $1.8 million in data breach costs and enjoyed accelerated data breach identification by over 100 days, on average. 4. Secure and Encrypt Data Stored in the Cloud Due to the increased number of remote workers, many employers have implemented cloud-based storage and systems into the workplace over the past several years. Given this rise in popularity, threat actors have consistently targeted these stockpiles of valuable data, including employee and consumer personally identifiable information (PII). In fact, in 2023, 82% of all data breaches involved cloud-based data, and these breaches involved higher costs and longer identification and containment times. To reduce risk, you should require multifactor authentication for employees to gain access to company networks. You should also create and maintain secure, offline and encrypted backups of your data and regularly test those backups. Moreover, you should choose strong cloud providers that adhere to strict security protocols and standards, such as the implementation of DevSpecOps application development. 5. Engage Counsel to Ensure Regulatory Compliance Businesses across the country continue to face increased data privacy requirements thanks to a wave of new laws cropping up state by state. For example, The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) may impose federal sanctions on companies that facilitate ransomware payments to a sanctioned person, even if the ransomware victim was unaware of the sanction nexus. Failure to comply with such regulations proved costly for employers impacted by data breaches in 2023. According to the 2023 CODBR, organizations with low levels of regulatory compliance suffered an average cost of $5.05 million per data breach, a whopping $1.04 million more than organizations with high levels of regulatory compliance. Fortunately, you can easily avoid this unnecessary cost by engaging knowledgeable counsel before a breach occurs to not only ensure compliance with data privacy regulations but also to put yourself in the best position to minimize such threats. Conclusion Fisher Phillips will continue to monitor further developments in this area, so scan the QR code to subscribe to Fisher Phillips’ Insight system to stay up-to-date. If you have any questions regarding how cybersecurity threats could impact your organization or best practices for addressing those threats, please consult your Fisher Phillips attorney, the authors of this Insight or a member of Fisher Phillips’ Data Security and Workplace Privacy Practice Group. https://www.fisherphillips.com/en/Subscribe.html 22 Illinois Automobile Dealer News
CVR: THE EVR SOLUTION BUILT FOR YOUR DMS THE BEST CUSTOMER VEHICLE REGISTRATION EXPERIENCE IN ILLINOIS CVR is the only choice for automotive dealers who demand an EVR solution with a flawless, robust and secure integration to your DMS. Unlike our competitors, we’ve partnered with the IADA to deliver a faster and more efficient titling and registration process. Your customers won’t have to do anything after the sale except drive away happy in a fully registered vehicle. We’ve also teamed with Automotive Titling Corporation (ATC), to offer a full in or out-of-state solution that creates an integrated, 50-state workflow within your CDK DMS. The strongest integrations and solutions available for your DMS are here right now. To learn more and get started, email a CVR representative at cvr-il@cvrconnect.com or call 800.333.6995 © 2024 CVR. All Rights Reserved. 22-4261 SPEED/ACCURACY No more rekeying of data BETTER PROTECTION Safer consumer data CUSTOMER SUPPORT The finest in the industry INTEGRATION Connect with your DMS We also work with the IADA to provide compliance and training webinars to keep your staff up to date. As the builders of the first EVR for use in Illinois over 20 years ago, not only have we learned how to do this right, we know from experience how to treat you right. That’s why we’re committed to innovation while continuing to provide the most complete account service and customer support in the industry.
Illinois Automobile Dealers Association 300 West Edwards Street Springfield, Illinois 62704 This Magazine Is Designed and Published by The newsLINK Group, LLC | 1.855.747.4003 BROWN & BROWN Overview Brown & Brown Dealer Services (BBDS) is an F&I performance company aimed at helping to build tailored solutions for today’s vehicle retailer. The complexities inherent to the F&I business demand a white glove approach with the flexibility to satisfy a variety of brands or markets. The BBDS network of providers helps ensure the proper F&I program is developed and executed to help maximize upfront sales and profits, provide a top-tier customer ownership experience and create wealth-building opportunities downstream. How We Can Help Our BBDS team is comprised of experienced and knowledgeable F&I specialists that have worked with dealers for decades. They are equipped with access to the industry’s top product providers, a top-rated training and development program and commercial insurance products to help you find solutions to fit your business needs. F&I Products • Flexibility to help fit your needs • Access to A-rated providers • Two in-house administration companies • Wealth-building opportunities on products Training Solutions • F&I Management Certification School • Learning Management Systems (LMS) delivering online training • Monthly webinars and video training archive • Ethics & Compliance Certification Participation Programs • Program selection based on your goals and objectives. NCFC, CFC, Retro or DOWC • Nationally recognized team that specializes in evaluating and configuring personalized solutions • No obligation evaluation of your current program Property & Casualty • More markets for your risks mean more choices to help meet your individual business and personal needs • Knowledgeable professionals to help identify your unique risks and find solutions to help protect your assets Employee Benefits • • Health Collective Purchasing Arrangement that includes a dedicated service representative to help you with premium savings, national and regional coverage and to DEALER SERVICES The Broker for the Dealer Custom F&I Programs That Help Deliver Results and Profits Brown & Brown Dealer Services 263 Shuman Blvd. • Naperville, IL 60653 | bbrown.com | (847) 612-9361
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==