JACK KAIN SR., TIME DEALER OF THE YEAR GOODBYE GAS, HELLO ELECTRIFICATION OFFICIAL PUBLICATION PAGE 06 PAGE 20
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1 KENTUCKY AUTO DEALER ©2021 Kentucky Auto Dealer | The newsLINK Group, LLC. All rights reserved. KADA is published four times each year by The newsLINK Group, LLC for Kentucky Auto Dealer 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 Kentucky Auto Dealer, 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. Kentucky Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of the Kentucky Auto Dealer Association. While the Kentucky Auto Dealer 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. CONTENTS 06 14 20 02 PRESIDENT'S MESSAGE 04 2022 KADA EXECUTIVE COMMITTEE AND SUPPORT OUR KADET FUND 06 JACK KAIN, SR., TIME DEALER OF THE YEAR 09 2022 IMPORTANT DATES TO REMEMBER 10 GETTING TO KNOW KADA INCOMING CHAIRWOMAN, NANCY SPARKS 12 WELCOME 2022 BOARD MEMBERS 12 KADA 2022 CONVENTION 13 MEET YOUR KADA TEAM: KAITLIN CARLYLE 14 CURRENT AND CONTINUED CHALLENGES FOR BUSINESS EMPLOYERS IN THE WORKPLACE AGAINST THE BACKDROP OF THE ONGOING PANDEMIC 16 SUCCESSION PLANS 18 AMBER MARTIN RECEIVES COX AUTOMOTIVE AND NAMAD RISING STAR AWARD 20 GOODBYE GAS, HELLO ELECTRIFICATION 23 KADA PREFERRED PARTNER PROGRAMS
2 KENTUCKY AUTO DEALER PRESIDENT'S MESSAGE JASON WILSON THIS IS AN EXCITING TIME TO BE A PART OF KADA, AND WE LOOK FORWARD TO MUCH MORE GROWTH AND SUCCESS IN 2022. As we start a new year, I’d like to first look back at all we accomplished in 2021. Last year afforded me the honor of stepping into my role as President of your Association, and I believe that together with your support, we have achieved many successes. To start, we experienced exponential growth in membership, both from new dealers and new partners. We welcomed 29 franchised dealers, four independent dealers, and 17 Allied members. Thank you to those who have joined our Association and those who are offering their resources and support. From a legislative standpoint, we saw numerous victories. We were able to stop the trade-in tax cap – which would have made purchasing a new vehicle as a consumer very unaffordable. We were also extremely involved in the implementation of PPP loan forgiveness. And we are gradually moving ahead in the battle to modernize the titling and registration process. As we look ahead, the fight toward modernization continues and will be addressed in this year’s General Assembly Session. We will also be paying close attention to all other legislative matters that could affect your business. We plan to continue to build up this Association and grow our membership, both in dealers across the state, and in partnerships with Allied members. Our goal is to keep implementing new initiatives to help support your business in the form of educational resources, podcasts with industry leaders, networking events and partnerships. One great example of new things we are offering is the KADA Voluntary Benefits program with Integrum Advisors. This is an exciting time to be a part of KADA, and we look forward to much more growth and success in 2022. Be on the lookout for all our news and updates, and as always, please continue to be engaged.
RMG D R I V I N G D E A L E R P R O F I T A B I L I T Y
4 KENTUCKY AUTO DEALER 2022 KADA EXECUTIVE COMMITTEE TREASURER ROB MARSHALL CHAIR-ELECT JOE CUMMINS PAST CHAIR KIM HUFFMAN VICE-CHAIR DAVID MOORE CHAIRWOMAN NANCY SPARKS PAST CHAIR CARL SWOPE PAST CHAIR SHANE COLLINS PAST CHAIR DUKE BRUBAKER NADA DIRECTOR DAN RENSHAW PAST CHAIR JIM REYNOLDS SUPPORT YOUR BUSINESS BY CONTRIBUTING TO OUR KADET FUND As we enter into a new year – and an election year at that – it's more important than ever that we have a presence and a voice to push the issues that are affecting your business. In order to do that, we are asking for even more help and participation this year. As you know, modernizing the titling and registration process is at the forefront of our agenda for this year's Session. We will be presenting a new bill in front of the General Assembly that would make this process remarkably seamless and eliminate the challenges you have faced in the past. In order to be successful on this front, we must build and maintain relationships with the legislators that represent you in each of your districts. We are prepared to hit the ground running, but we need your financial support to help us do so. Please consider donating to our KADET fund today. You will notice we have revamped our KADET levels – we appreciate any contribution you are willing to make. WE are the car dealers, andWE need to have a loud voice! See below for the 2022 KADET levels and visit our website at kyada.com/kadet-pac to make an online contribution. President’s Club – $2,000 Next Gen President's Club – $1,000 Senate Club – $1,500 House Club – $1,000 Patron Club – $800
6 KENTUCKY AUTO DEALER JACK KAIN, SR.
7 KENTUCKY AUTO DEALER CONTINUED ON PAGE 8 The nomination of Jack Kain, Sr., founder of Jack Kain Ford in Versailles, Kentucky, for the 2022 TIME Dealer of the Year award was announced by TIME. Kain is one of a select group of 47 dealer nominees from across the country who will be honored at the 105th annual National Automobile Dealers Association (NADA) Show in Las Vegas on March 11, 2022. The announcement of this year’s annual award was made by Viktoria Degtar, Global Chief Revenue Officer, TIME, and Doug Timmerman, president of Dealer Financial Services, Ally Financial. The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. Recipients are among the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Kain was chosen to represent the Kentucky Automobile Dealers Association in the national competition – one of only 47 auto dealers nominated for the 53rd annual award from more than 16,000 nationwide. “I built my dealership on a foundation of honesty and integrity,” nominee Kain said. “We treat every visitor as an honored guest and put customer satisfaction and transparency first – both before and after the sale.” Kain served in the United States Air Force and earned a B.A. from the University of Kentucky in Lexington in 1951. He grew up on a dairy farm and while in college, he began to sell cars part-time at a local dealership. Kain realized he had a knack for sales and a passion for the retail automotive business. He acquired a DeSoto-Plymouth store in Frankfort, Kentucky, in 1953, and launched his first Ford store in Frankfort in 1959. He later moved his Ford operation to Versailles in 1979, added another Ford store in London, Kentucky, and bought and sold Chevrolet, Chrysler and Nissan dealerships over the years. Kain built his current stateof-the-art facility in Versailles in 2003 and sold the Ford dealership in London in 2012. Today, he owns Jack Kain Ford in Versailles with family members. Four of his children – Bob, Patrick, Bill and Vickie Kain-Fister – work for the dealership and are the next generation to carry on his legacy. “My children are making their own positive impact on this business and on the level of service provided to customers,” Kain said. “I’ve seen many changes in vehicles over the course of my career. The sheer inventiveness and technology now are amazing, and the choices provided to consumers are great. This industry is always interesting, and I am proud to say I sell cars.” As a trailblazer in the retail automotive sector, Kain was called on to serve in leadership positions on the state and national level. He was president of the Kentucky Automobile Dealers Association in 1982 and held numerous executive positions at NADA, including chair (2005), vice chair (2004), treasurer (2003) and secretary (2002), as well as contributing to the board of the NADA Foundation.
8 KENTUCKY AUTO DEALER “My finest moment serving NADA was in 2005 when we visited Mississippi and Louisiana after Hurricane Katrina and distributed hundreds of thousands of dollars raised by the automotive industry for individuals and workers at dealerships who were devastated by the storm,” Kain said. “It was the highlight of my time in this business and as a board member for NADA.” And while Kain chose a career in the auto industry over a life of farming, he never forgot his roots. “My car business has enabled me to help a lot of farmers keep their farms going,” he said. Kain also gives back to his community and has coached youth sports, including baseball, basketball and football. He consistently sponsors local school events and educational programs for Versailles and supports numerous organizations in his local area, the county of Woodford and central Kentucky. “I have worked to achieve a better quality of life for all through improved schools, cleaner water, better healthcare options and more activities,” he said. Kain has contributed his time, talent and resources to Woodford County Public Schools: Northeast Woodford Water District (district leader since 1959); Jack Kain Ford Military Support Fund; Hope Center in Lexington; St. Leo Catholic Church and St. Leo School in Versailles; Versailles Area Chamber of Commerce (founder); Kentucky Community & Technical College System; Kentucky Circuit Court Clerks’ Trust for Life (program to raise awareness and encourage organ and tissue donation); and United Way of the Bluegrass, to name a few. But perhaps his most profound impact on the Woodford County Community was in serving on the Economic Impact Committee which brought 100’s of jobs to the area and rejuvenated historical downtown Versailles. “The retail automotive industry has given me the opportunity to give back to my community in many ways,” he said. Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive an additional $5,000 for their favorite charities and the winner will receive an additional $10,000 to give to charity, donated by Ally. In its eleventh year as exclusive sponsor, Ally also will recognize dealer nominees and their community efforts by contributing $1,000 to each nominee’s 501(c)3 charity of choice. Nominees will also be recognized on AllyDealerHeroes.com, which highlights the philanthropic contributions and achievements of TIME Dealer of the Year nominees. “In cities and towns across the country, auto dealers make a big economic impact — going the extra mile to strengthen their communities,” said Doug Timmerman, president of dealer financial services, Ally. “It’s an incredible achievement to be nominated for TIME Dealer of the Year. The program not only CONTINUED FROM PAGE 7 recognizes leadership in business and customer service, but also a commitment to giving back and doing it right.” About TIME TIME is a global media brand that reaches a combined audience of more than 100 million around the world. A trusted destination for reporting and insight, TIME’s mission is to tell the stories that matter most, to lead conversations that change the world and to deepen understanding of the ideas and events that define our time. With unparalleled access to the world’s most influential people, the immeasurable trust of consumers globally, an unrivaled power to convene, TIME is one of the world’s most recognizable media brands with renowned franchises that include the TIME100 Most Influential People, Person of the Year, Firsts, Best Inventions, World’s Greatest Places and premium events including the TIME100 Summit and Gala, TIME100 Health Summit, TIME100 Next and more. About Ally Financial Inc. Ally Financial Inc. (NYSE: ALLY) is a digital financial services company committed to its promise to “Do It Right” for its consumer, commercial and corporate customers. Ally is composed of an industry-leading independent auto finance and insurance operation, an award-winning digital direct bank (Ally Bank, Member FDIC and Equal Housing Lender, which offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products), a corporate finance business for equity sponsors and middle-market companies, and securities brokerage and investment advisory services. A relentless ally for all things money, Ally helps people save well and earn well, so they can spend for what matters. For more information, please visit www.ally.com and follow @allyfinancial. For more information and disclosures about Ally, visit https://www.ally.com/#disclosures. For further images and news on Ally, please visit http://media.ally.com. About the NADA Show The annual NADA Show brings together more than 20,000 franchised dealers and their employees, industry leaders, manufacturers and exhibitors to learn about the latest auto industry tools, trends, products and technologies. “MY CAR BUSINESS HAS ENABLED ME TO HELP A LOT OF FARMERS KEEP THEIR FARMS GOING,”
9 KENTUCKY AUTO DEALER STAY CONNECTED WITH KADA THROUGH FACEBOOK, WEBSITE AND OUR PODCAST kyada.com facebook.com/kadainc Podcast is available on Spotify, Apple Music and YouTube channel: Kentucky Horsepower 2022 IMPORTANT DATES TO REMEMBER Visit kyada.com for more information on each above event. February 10 Executive Committee Meeting Board of Directors Meeting February 10 Legislative Reception May 23-25 Executive Committee Retreat June 23 Summer Board of Directors Meeting November 10 Executive Committee Meeting Board of Directors Meeting September 12 KADA Annual Golf Tournament KADA EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS MEETINGS
10 KENTUCKY AUTO DEALER GETTING TO KNOW KADA INCOMING CHAIRWOMAN, NANCY SPARKS Nancy Sparks is the incoming KADA Chairwoman. KADA recently interviewed Nancy so our members could learn more about her as she begins her work in her new position. Tell us about your professional background. Did you always aspire to be part of the automotive industry? I did not actually. It started with my late husband, Pat DeCastro. He wanted to be a dentist, but he sold cars to work through college and kept moving up. Ford promised him a point after he started troubleshooting for them. The point came up in Cincinnati, but he expanded into northern Kentucky, and his group of dealerships became the Kerry Automotive Group. Kerry is a family name. All this happened before I was even in the picture. Once we got married, we started a family right away, and I became a stay-athome mom with two children; a daughter and a son. I was the quintessential soccer mom attending PTA meetings. Sadly, Pat passed away suddenly on Christmas Eve in 2013 after a surgical procedure. I was 58 at the time, and the children were in their mid-to-late thirties. Kerry Automotive Group had 450 employees and five general managers who all promised to help me if I took on Pat’s job. Describe your educational background. What did you study? I wanted to be a primary education teacher at an elementary school. My college years definitely benefited me at the dealership, and so did the skills and leadership experiences I gained while my children were growing up. I really learned how to deal with people. Are there any specific individuals who had a major impact on your career? Pat surrounded himself with talented, loyal and dedicated people. They guided and educated me, and they are still with me now. They are my right-hand people. My attorney, Bruce Krone, is one of them. He was the business attorney and our family estate attorney, too. He has been the most loyal, dedicated partner and friend I could ever ask for. What is the most rewarding part of your career? Manufacturers knew I had to run the enormous stores I inherited, and they were leery because I had no experience in the business. But I have successfully handled all the obstacles and challenges to become the dealer principal in all 11 franchises, and I am now the CEO. Also, I am deeply proud of retaining all of our quality employees. We really haven’t lost anyone. What do you think will be some of the auto industry’s dominant trends in the next 5-10 years? It’s definitely the transformation to EV and how the industry will handle these challenges. But EV alone is not the answer to our energy and transportation problems. Switching to EV will mean solving problems with the power grid, charging stations, materials, and battery supplies. I think we are headed toward a combination of three
11 KENTUCKY AUTO DEALER technologies: EVs, fossil fuel vehicles, and hydrogen fuel cells. Another important trend is finding the sweet spot for inventory levels. It’s advantageous for manufacturers and dealers not to have as many vehicles on dealer lots; however, we still have to find the optimal point. Why is it important to be a KADA member? What makes it beneficial? Pat didn’t join any auto associations, but when I took his place, I knew that I needed to learn everything that I could and that I could benefit from this additional resource. We are in the tri-state area of Indiana, Kentucky, and Ohio, and we are two minutes from the river and bridge into northern Kentucky. We have three Ohio stores and eight Kentucky stores. I therefore eventually joined four different associations from these locations: • KADA • NADA • GCADA • OADA The associations help keep me current on trends. They also educate me about the legislative issues involved in our business, and they provide helpful resources to enable me to better my business. It’s great to be able to represent KADA to the legislators in the northern Kentucky area. The added bonus about getting involved in KADA has been the wonderful friendships that I’ve built with other dealers, office managers, sales managers and colleagues around Kentucky. Not getting involved is a mistake, and those who don’t join are definitely missing the boat. What inspired you to serve as a leader within the association? When I was asked to join the Executive Board as Treasurer of KADA, I saw it as giving back. I thought it was an opportunity to continue to learn all that would be done in a year. What I didn’t realize was that being the Treasurer was just a stepping stone. Four years later, I am now the Chairwoman. Are you involved in any civic or charitable organizations? • Cincinnati Children’s Hospital Medical Center • Ronald McDonald House • The Red Cross • The Juvenile Diabetes Research Fund My sister’s daughter had a heart transplant when she was a year old. Her heart was the size of a strawberry and was failing when she was diagnosed. Now she is a very spunky 7-year-old. We are totally indebted to the hospital, and that’s one of the reasons I feel strongly about giving back. If you look back at your career and life, what would be three things that you have learned that you would pass on to a younger member within the auto industry? 1. Continue to learn at every opportunity that arises to stay current and move your store forward. 2. Surround yourself with the best people you can find. 3. Treat every employee and customer with the utmost respect. Doing that has taken me just as far as everything else I’ve learned. You have to show employees how important they are to the store’s success. Describe your all-time favorite vehicle (it can be one you’ve owned or something on your wish list). What are you driving now? My favorite vehicle is a Volkswagen beetle. When Volkswagen decided to stop making them, I bought a 2019 turbo convertible bug. I love sedans, and my regular car is the Nissan Maxima. Tell us about your family. I grew up in Cincinnati with four brothers and three sisters. My maiden name is Brady, and everyone called us the Brady bunch. After being Nancy DeCastro for over 40 years, I recently married Tim Sparks in June. Tim was one of Pat’s general managers. I didn’t know him well because everybody told me, “The stores are perfect, he’s perfect, and you don’t need to go down there.” But four years ago, I asked Tim to be the president of Kerry Automotive Group. He’s pretty awesome. We fell in love as we worked together. In addition to my children, I have two grandchildren, 26 nieces and nephews, and now we are moving on to grandnieces and grandnephews. It is a great Irish-Catholic family! Tim has three boys, and our children all get along. It’s truly been wonderful to expand our family even more. What is your favorite way to spend your free time? Do you have any unusual hobbies? I love to cook and entertain, paint, garden and spend time with family. I am a real color person, so I love painting still lifes with pastels of anything botanical, like a bowl overflowing with fruit. You can get gorgeous colors with pastels. Any last words? My life is being a dealer, and I am grateful for it. I would never have imagined myself running dealerships and being the Chairwoman of KADA, but I wouldn’t change my journey for the world.
12 KENTUCKY AUTO DEALER KADA 2022 CONVENTION SAVE THE DATE! We hope to see you at our 75th Annual KADA Convention, taking place June 20-23, 2022, at the Omni Grove Park Inn in Asheville, North Carolina. Registration is now open! Visit www.kyada.com/kada-convention to register today. For any questions, please reach out to Melissa Peach at mpeach@kyada.com. WELCOME 2022 BOARD MEMBERS Thank you to our 2021 Board members for their service and commitment. Welcome to our new Treasurer, Rob Marshall, and new 2022 Board members: District 1: Lucinda Gray District 2: David Jaggers District 3: Bob Hook III District 4: Catherine Zimmer District 5: Tim Short District 6: Steve Gates kyada.com/kada-convention.html
13 KENTUCKY AUTO DEALER We recently sat down with our Communications Director, Kaitlin Carlyle to get to know her better. Kaitlin lives in Argentina and works remotely. She is an asset to our team and we thank her for her time. We want to give KADA members an idea of who you are. Choose three words or phrases to describe yourself. 1. Open-minded 2. Hardworking 3. Relentlessly optimistic MEET YOUR KADA TEAM: KAITLIN CARLYLE Where are you from? I was born in Lancaster, Pennsylvania, but spent most of my life in Richmond, Virginia, where my family is now. I also lived in New York City for a few years, as well as in Spain. Tell us a little about your family. I have three older brothers and five nieces and nephews. What is your educational background? I have my Bachelor’s degree in Spanish and International Trade from Clemson University. Who are your most important mentors? My parents. What is the best piece of advice you ever received? If you’re ever thinking about doing something, the answer is yes. What is the most important thing you’ve learned at KADA? The importance of building and maintaining connections. Describe your life purpose in three sentences or less. Build meaningful relationships, give back and always practice gratitude. How did you hear about KADA? Why did you want to work for the association? I worked for VADA in Richmond with Jason (Wilson). When he moved on to Kentucky and reached out, I couldn’t say no! Why are you working for KADA in Argentina? I moved to Argentina two years ago because it had been my dream to live here for a while. When I moved, I made the hard decision to leave my position at VADA. I really enjoyed what I did at the association there and working with Jason, so to be able to do this from my current country of choice is the best of both worlds for me. What do you love about your job? I love that we work with car dealers — they are such an interesting bunch. Also, it’s great to feel like we are providing resources and tools that actually make a difference, and the things that I create from a marketing and communications standpoint are reaching real people. What are your hobbies? Cooking, eating and traveling. Is there anything else you would like to tell the association members about yourself? I’m just very grateful for the opportunity to work with our members even though I’m on a different continent, and I look forward to meeting them at some of our upcoming events next year.
14 KENTUCKY AUTO DEALER CURRENT AND CONTINUED CHALLENGES FOR BUSINESS EMPLOYERS IN THE WORKPLACE AGAINST THE BACKDROP OF THE ONGOING PANDEMIC By Julie A. Cardosi, Law Office of Julie A. Cardosi, P.C With the current spread of COVID-19 variants, many businesses, including dealerships, are facing challenges associated with requiring proof of employees’ vaccination status, wearing masks and submitting to regular COVID-19 testing. Dealerships should consult with their own private attorneys about the careful development of vaccination policies to address these issues. Earlier this year, the United States Centers for Disease Control and Prevention (CDC) and several state and local public health authorities had lessened some of the restrictions relative to fully vaccinated individuals. However, with the more recent onset of the very transmissible delta variant, resulting in an increase of COVID-19 cases throughout the country, the CDC and other public health agencies continue to announce additional changes which, as of the writing of this article, include without limitation, recommending that fully vaccinated individuals wear masks in certain indoor venues. Other recent measures have included the federal government (along with certain state and local authorities) requiring certain public employees and those who work in highrisk environments (e.g., health care) to show proof of vaccination or submit to regular Covid-19 testing, wear masks and physically distance from fellow employees and customers or visitors. Some businesses and companies have announced vaccination and testing policies that are operative with respect to their employees. In doing so, these businesses are traversing the balance between
15 KENTUCKY AUTO DEALER Julie A. Cardosi is an attorney and president of the private firm, LawOffice of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for 35 years and represents the business interests of franchised new vehicle dealers. Formerly in-house legal counsel for IADA, she concentrates her practice in the areas of mergers and acquisitions and other transfers of dealer ownership, franchise law, commercial law, state and federal regulatory compliance matters, including employment, and other areas impacting day-to-day dealership business operations. She has also served as an 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 on, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1. 1 See U.S. Centers for Disease Control and Prevention, “Workplace Covid-19 Vaccine Toolkit” (07-29-21 update) (“If an employer requires employees to provide proof that they have received a COVID-19 vaccination from a pharmacy or their own healthcare provider, the employer cannot mandate that the employee provide any medical information as part of the proof.”) https://www.cdc.gov/coronavirus/2019ncov/vaccines/toolkits/ essential-workers.html 2 See https://www.eeoc.gov/wysk/what-you-should-know-about- covid-19-andada-rehabilitation-act-and-other-eeo-laws 3 As further indication of the evolving regulatory landscape concerning the subject of this article, after it was written, the U.S. President issued Executive Order 14042 and announced a COVID-19 Action Plan, directing the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) to draft rules (Emergency Technical Standard (ETS)) requiring companies with 100 or more employees to either (1) ensure that their workforce is “fully vaccinated” or (2) require any workers who remain unvaccinated to produce a negative test for COVID-19 at least once a week. At the time of publication, OSHA’s ETS was still pending, making it all the more essential that covered businesses seek the advice of their legal advisers. employee and workplace safety and privacy considerations. Indeed, while some states are issuing vaccine and testing mandates, others are attempting to prevent businesses and government agencies from requiring individuals to show proof of vaccination status. The following general principles can assist businesses as they work with their legal advisers to address some of the issues in the development of their own policies. First, while an employer may have a legitimate business need to inquire about an employee’s vaccination status, proposed questions about vaccination status should, at a minimum, be reviewed with the business’s attorney. Employers must exercise caution to avoid making medical inquiries¹ in contravention of the Americans with Disabilities Act (ADA) and other similar laws. The federal Equal Employment Opportunity Commission (EEOC) has commented2 that if employers ask employees to provide vaccination proof, they should consider warning the employee not to provide any medical information as part of the proof to avoid implicating the ADA. If a business were to require its employees to be vaccinated, it must also consider reasonable accommodations for employees with disabilities or medical conditions or a religious exemption. Second, information an employee provides about vaccination status must be held strictly confidential. Further, such information must not be used to make employment decisions. Third, since the beginning of the pandemic, the federal, state and local regulatory and legal landscape has been constantly changing, with new and modified COVID-19 orders and guidance issued regularly3. For this additional reason, it is imperative that a business’s vaccination status policy be developed with the assistance of legal counsel. The ever-evolving requirements can impact an employer’s policy. Therefore, employers must continue to be flexible with respect to their policies and stay vigilant and current about any federal, state and local rules and developments that might be impactful. This is also helpful in communicating with and educating employees and customers about the policies. To paraphrase the words of Winston Churchill, neither success nor failure is final, “it is the courage to continue that counts.” The pandemic has caused each of us to reach deep within ourselves and persevere through the adversity and challenges of the present time. SOME BUSINESSES AND COMPANIES HAVE ANNOUNCED VACCINATION AND TESTING POLICIES THAT ARE OPERATIVE WITH RESPECT TO THEIR EMPLOYEES. IN DOING SO, THESE BUSINESSES ARE TRAVERSING THE BALANCE BETWEEN EMPLOYEE AND WORKPLACE SAFETY AND PRIVACY CONSIDERATIONS.
16 KENTUCKY AUTO DEALER SUCCESSION PLANS There are risks and benefits when leadership changes, and both are too important to ignore. Succession plans ensure a better transition between owners. They can also be the difference between surviving or permanently closing. Succession plans are about replacing yourself. They outline a process where the first step is to move someone into management before becoming the new owner. They are especially important for dealers because so many people within the dealership rely on its continuation. Suppose one or more owners want to transfer their business to someone else. In that case, the work to be done includes identifying and maintaining whatever makes the business valuable, developing employees who can potentially step into a larger role later on and figuring out the best tax strategy before and during the transition. In many businesses, the pandemic changed business transition plans, timelines or both. Some owners plan to transition sometime during the next decade. Regardless, the best time for any company to transition is when the company is prospering. There’s less chance of running out of needed resources at a key point of the transfer. As you make your succession plan, keep the following suggestions in mind. • Decide what you want to do first. There are several questions to answer before you start. Are you ready to sell your business? If you want to keep the business in the family, who could lead in your place, or should leadership involve several people? Is anyone going to feel bitter or unhappy if you don’t select them? If you want to sell the business instead, what will that mean short-term and long-term? • Schedule planning sessions as soon as possible. You want to maximize the number of choices you have, not be forced into less-than-ideal decisions by urgent circumstances. If you are selling soon, you need to enhance the company’s value as much as possible as soon as you can. If selling the company will happen later, the focus should be on preserving its value even if you don’t have to increase its value. • Ask the right questions by looking at your company from the perspective of the next owner. What should you be asking? Just as transferring an unprofitable company doesn’t make sense, it also doesn’t make sense to transfer a company whose success depends too much on retirement-age people. Figure out what makes the company stable and sustainable, and make sure the company’s success is not dependent on one or more key people
17 KENTUCKY AUTO DEALER who plan to leave. Another area to focus on is technology. Owners who want to transfer their company will have an easier time doing so if they have up-to-date equipment and processes. • Do your best to anticipate possible crises. You can’t expect to see everything in advance, of course, but there is a lot you can see. Do you have enough financial reserve to get through a short-term drop in revenue? What if you or other key employees died or were hospitalized? Do you have people who could step up and take over daily operations? What if you lost an important, long-term client? Do you have enough business from other clients to survive? • The company should be bigger than one person, especially if that person is you. Cross-train several people within the company so other people are ready to fill in the gap if one or more key people are unavailable. This group is your management team. Write job descriptions and identify the characteristics and traits needed for each job. Assess how people are doing in their job, and help them fix gaps. Company leaders need to understand the business, but they also need to understand its history, risk-tolerance and values. • Invest in key employees and give them reasons to stay with the company. Let them have a voice in some of the decisions. Each generation has its strengths, but your strengths and theirs are probably not the same. The internet was launched April 30, 1993, almost three decades ago. Inevitably, people who came of age after 1993 are usually more comfortable with technology. • Retirement doesn’t have to mean quitting completely. Of those surveyed, 30% wanted to hand off leadership to others but continue to work for a while. About 7% still wanted to own the business but wanted to decrease their involvement. Start preparing the new owner as soon as you identify them. If you plan to sell your company, for whatever reason, it’s a good idea to hire the potential new owner first. That way, they get the same benefit they would have had if they’d been a member of the family. Sometimes it isn’t immediately clear whether a family member would like to take over the company. Maybe they are in school; maybe they’ve chosen a different career for at least a while. Giving them time to grow and decide isn’t bad. One attorney noted that the best successors often worked a few years outside the family business. What is the benefit of that? • The best choice might not be available for a while, especially if they are still growing up. Some people are worth waiting for, if at all possible. • The owner needs to be a person who communicates consistently and effectively and can build consensus. Employees who know the company is stable and doing well reward that with increased confidence in their work. • Experience gained in a different environment can give your successor an invaluable perspective that will benefit the company if they return. • Respect has to be earned, not given, and other employees are more likely to respect someone who proved they can succeed independently. It’s a problem if the new owner looks as though they bypassed gaining the necessary experience. Sometimes an unqualified family member wants to take over the family business, and the owner doesn’t want to tell them they aren’t a good fit. Yes, that’s a hard conversation. But if you don’t evaluate them fairly and hold them to the same standards as people outside the family, you are setting them up to fail. They may destroy the business, and if they do, everyone involved will have to develop a plan B. You don’t want that. How can you evaluate the next leader? The necessary skillset includes the following: • Courage and integrity both matter in any industry. Bad work and poor leadership will cost you repeat business. Also, employees who don’t respect their leaders are likely to move on as soon as possible. • The owner and other leaders within the company need to have the technical and interpersonal skills to make the right decisions. • Businesses are a team effort. The owner needs to support ongoing learning effectively and be a team-building coach. • Everyone in the company should ideally develop and share the same overall vision, but the owner has a particular responsibility to set optimal goals and help everyone accomplish them. • It’s a joke, but it’s true: change is a constant. The owner needs to be flexible about plans, or the company will flounder at some point. According to Family Business Review, which focuses on family businesses, more than 30% of family owned businesses get passed on to a second generation, 12% survive to the third generation, and 3% remain in business after the fourth generation. Of course, there are other kinds of multigenerational businesses, but succession planning increases your odds for success no matter who owns the business. That is why it is worth doing. INVEST IN KEY EMPLOYEES AND GIVE THEM REASONS TO STAY WITH THE COMPANY. LET THEM HAVE A VOICE IN SOME OF THE DECISIONS. EACH GENERATION HAS ITS STRENGTHS, BUT YOUR STRENGTHS AND THEIRS ARE PROBABLY NOT THE SAME.
18 KENTUCKY AUTO DEALER AMBER MARTIN RECEIVES COX AUTOMOTIVE AND NAMAD RISING STAR AWARD In partnership with the National Association of Minority Automobile Dealers (NAMAD), Cox Automotive awarded its Rising Star Award to Amber Martin, director of community and business partnerships for Martin Management Group, headquartered in Bowling Green, Kentucky. Martin was chosen based on nomination criteria, including being under the age of 45 and a NAMAD member, operating within the automotive industry, demonstrating a strong commitment to their local community and minority populations, and contributing to the automotive industry. • This recognition emphasizes the importance of diversity in the automotive industry. • In Martin’s honor, Cox Automotive is donating $5,000 to the Institute for Behavior and Health Inc. and its Stop Drugged Driving initiative. • On Martin’s behalf, Cox Automotive will make a $10,000 donation to fully fund the tuition for a participant in City of Refuge’s four-month, 40-hour per week Automotive Technician Training program. Keisha Duck, vice president, talent, learning and culture, Cox Automotive, was joined by NAMAD President Damon Lester to present the award to Martin at the awards dinner in Miami Thursday, Dec. 9, during the 41st annual membership meeting. Duck said: “On behalf of Cox Automotive and in partnership with NAMAD, I am honored to recognize Amber Martin as the 2021 Rising Star. Not only does Amber exemplify the words ‘rising star,’ but she also exemplifies a core value of Cox and the Cox family – community engagement.” Reflecting on Martin’s recognition, Lester added, “Amber Martin is truly a ‘rising star.’ Her business acumen, personality and experience are a testament to her success in our industry.” Martin joined the family-owned and operated Martin Management Group in 2006. In her 15-plus year career, she has contributed to various company initiatives – from real estate acquisition, recruitment and policy development to inventory management and public relations. In 2018, Amber was appointed to a two-year term on NAMAD’s NextGen board as Chair of the Marketing and Outreach Support Committee. She currently serves as a board member for the Kentucky Automobile Dealers Association and spearheads the association’s NextGen program. Additionally, Martin is the relationship manager for her family’s three endowments and dedicates countless hours volunteering with the Junior League of Nashville, United Way of Southern Kentucky and Junior Achievement of South Central Kentucky. “To be recognized as a ‘Rising Star’ by Cox Automotive is an incredible honor, and receiving this award is even more special because of the long-standing partnership that my family’s company has with both Cox Automotive and NAMAD,” said Martin. Cox Automotive is donating $5,000 in Martin’s honor to the Institute of Behavior and Health Inc. (IBH), the charity of her choice, and its Stop Drugged Driving initiative. “Through Cox Automotive’s generous honorarium, I’m very grateful to help advance the Institute for Behavior and Health’s mission to raise awareness and create policy for driving under the influence of drugs,” said Martin. “When I came across their website, StopDruggedDriving.org, I truly felt supported as this issue has tragically affected my family. With the advocacy of organizations like IBH, it is my hope that the topic of lawmaking against drugged driving draws more attention than the topic of legalizing marijuana. As a second-generation automotive leader, it’s paramount to support the safe mobility of our communities for generations.” In addition, Cox Automotive is announcing a new philanthropic partnership in conjunction with this esteemed award. As an Atlantabased company, Cox Automotive is partnering with the City of Refuge to fund its Automotive Technician Training program. City of Refuge’s mission is to help individuals and families transition out of crisis. And, this year, Cox Automotive will make a $10,000 donation on Martin’s behalf to fully fund the tuition for a participant in the four-month, 40-hour per week Automotive Technician Training program. Martin Automotive Group, founded by the late Cornelius A. Martin in 1985, operates 15 automotive and motorsports dealerships across six states – California, Kentucky, Ohio, South Carolina, Tennessee and West Virginia. Other markets include real estate and aviation. About Cox Automotive Cox Automotive Inc. makes buying, selling, owning and using vehicles easier for everyone. The global company’s more than 27,000 teammembers and family of brands, including Autotrader®, Dealer.com®, Dealertrack®, Dickinson Fleet Services, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with nearly $20 billion annual revenues. They can be found at coxautoinc.com.
“The transition to BBDS couldn’t have gone any smoother. Since the change, our year-over- year F&I numbers are up $457 PER CAR, and the intensity and focus of both of our teams has been remarkable. We're working together to drive performance, while creating a better experience for our guests.” ~Aaron Zeigler Bbdealerservices.com @BBDealerServices @BBDealerServ Brown & Brown Dealer Services mneal@bbins.com A P E R F O R M A N C E I M P R OV E M E N T C O M PA N Y F & I TRAINING PROPERTY & CASUALTY EMPLOYEE BENEF I TS RE INSURANCE & DEALER OWNED WARRANTY SOLUT IONS 2021 Diamond Wi nner for F&I Trai n i ng Wi nner of 17 Consecut i ve Dea l er s’ Cho i ce Di amond Leve l Awards f rom Auto Dea l er Today and F&I and Showroom magaz i nes . Diamond i s the top award as voted on by deal er s & deal er management . Recogn i zed as a top comp l iance prov ider for the pas t seven year s v ia the same survey. Mi ke Nea l Pres ident , Brown & Brown Dea ler Serv i ces (270) 634- 1218
20 KENTUCKY AUTO DEALER GOODBYE GAS, HELLO ELECTRIFICATION The global move toward vehicle electrification has been going on for a long time now, but it is understandable if you feel like it will never arrive since few manufacturers have sent many EVs to dealer showrooms. Two of the controlling factors are regulations and the cost of building the necessary infrastructure. Although change is coming, it is still slow. NADA’s market beat for June 2021 and July 2021 ends with a graphic for powertrain market share. The percentages should surprise no one: • Gasoline has 87.5% of the market. The percentage at the end of June 2021 was 88.4%. • Diesel market share was 4.0% (up from 3.6% in June). • Hybrid market share was 5.0% (versus 5.0% in June). • Electric market share was 2.4% (the same as in June). • Plug-in hybrid market share was 1.1% (versus 0.8% in June). What are the important trends? One source of expertise is the McKinsey Center for Future Mobility, which offers advisory services to its clients. It has four hubs: Beijing, Detroit, Munich and Silicon Valley, and it advises many OEMs and other key stakeholders. The website for the McKinsey Center for Future Mobility lists four major trends in the automotive industry that will transform it and also have a ripple effect on other industries such as insurance: 1. Autonomous driving: Driver-assist technologies are making it safer for people to drive. Eventually, people will be passengers instead of drivers, and by 2030, the robotaxi market will control 70% of the market. 2. Connectivity: Engineers will continue connecting cars to information systems. Asutoth Padhi, a senior partner at McKinsey & Company, has said, “A car is really a supercomputer on wheels.” So far, people generally seem to like driving these supercomputers. Of potential buyers who answered a survey, 40% would switch automobile brands to gain more connectivity than they currently have. 3. Electrification: The industry is nearing an inflection point caused by changing regulations, infrastructure, battery economics and market demand. The website says that in 2016, 30-40% of the people in the U.S. and U.K. considered buying an EV. Drew Desilver wrote an online article on the Pew Research Center website, dated June 21, 2021, with more recent numbers. In the article, Drew Desilver said 7% of U.S. adults own an electric or hybrid vehicle, and 39% of survey respondents said they would consider buying an EV the next time they look for a new vehicle. 4. Shared mobility: Car ownership is convenient but expensive. New alternatives hope to offer equal or almost equal convenience without the stress and expense. However, shared mobility is still in the dream category since less than 1% of all miles traveled globally resulted from e-hailing trips. During a company video, Asutoth Padhi said the U.S. has had two inflection points: the shift from horses to cars and the current shift to electrification. However, since electrification probably won’t be profitable for another 3-5 years, industry participants reasonably want to know who will fund the necessary losses between now and then. It isn’t clear what the answer is to that question, but answers
21 KENTUCKY AUTO DEALER may come through collaboration and changes in regulations and technology. The McKinsey Center for Future Mobility wrote a 79-page publication about the upcoming changes. The report doesn’t include a publication date, but it does have information from the Aug. 31, 2019, IHS Markit Alternative Propulsion Forecast. Scan the QR code at the end of this article for the full report. The remainder of this article contains highlights from the report. Gasoline and diesel engines have dominated the industry for more than 100 years, but government mandates have pushed the industry toward more efficient and environmentally friendly transportation. McKinsey’s experts worked to provide information about the following questions: • What power train changes are being made? The report focuses on why, to what extent, where, and when. • What are the most important changes relative to systems and main components? • How will changes affect current powertrain value chains? • How can suppliers respond successfully? The report divides the component market into powertrain type, region and vehicle segment between 2018 and 2025. The report identifies strengths and weaknesses and assesses development and adoption trajectories for new powertrain technologies. It then offers a component by component analysis in four ICE component categories, three high-voltage categories, electrification categories and one fuel cell category. The report offers the following conclusions: • Buyer preferences and stronger CO2 regulations have created a tipping point for electrification. Battery costs are going down, and the U.S. is likely to increase the pace of building the necessary infrastructure for more charging stations. As a result, major markets will start distributing more EVs between now and 2025. • The rate of adoption between now and 2030 is going to be regional. Adoption will be determined by buyer preferences, infrastructure, regulation, technology and total cost of ownership. These forces, and the vehicle choices people have, are not the same throughout the country, and adoption will be affected accordingly. • Powertrains are changing dramatically. While the need for some ICE components will stagnate or decline, the need for electrification components will cause pockets of growth. You need to understand the changes to know how to adapt to the market. The report offers a four-part general strategy that anyone in the auto industry can use: • Nobody knows exactly how the transition is going to take place. However, you can still analyze the situation for your specific region and identify trigger points that will change what happens in the market. Once you know what is happening or likely to happen in your region, communicate what you see within your community and organization. Continue to track trigger points such as evolving customer preferences, incentives and regulations so you can promptly make changes when the time comes. • Keep an eye on global changes while managing performance focus areas that are specific to your business. You should know where you are doing well and where you have room to grow. Also, learn whether there are promising new markets to investigate. • Allocate resources so that R&D efforts are going toward new markets while supporting backbone and legacy markets only as much as necessary. The idea is to invest as little as possible in technologies that are going away. That way, you will have as little loss as possible. Cooperate with OEMs, suppliers, and people in the public sector if there is an effort to bundle research efforts or mitigate infrastructure costs. It’s a little like having roommates in an apartment or multiple generations in a home: look for opportunities to reduce costs by sharing them. • Being proactive about the need for change is better than just letting things happen and reacting to them after they become important. Before your organization makes big changes, you need to understand your organization’s transition-related strengths and weaknesses. Take advantage of strengths and minimize weaknesses to create a strategy that will help you steer your organization through the changes. As you go, you can adjust more quickly by paying attention to performance and accountability. This advice is all general; it’s necessarily vague because it applies to so many possible situations. But you can make it more specific. Consider your service department, for example. It’s hard to know whether you should expand unless you have some idea of how soon it will be before maintenance for ICE vehicles decreases much more than it currently has. But you know that day is likely to arrive faster in, say, Washington D.C. and California than it is in Wyoming. Plan accordingly. We are in the most exciting time for selling vehicles since Henry Ford started putting cars on the roads of North America. The new technology changes will improve the quality of life for everyone, especially as the technology begins impacting important areas such as carbon emissions and road safety. It’s going to be a glorious ride along the way. For the full report: https://mck.co/39IMhbh
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