OFFICIAL PUBLICATION OF THE GREATER LOS ANGELES NEW CAR DEALERS ASSOCIATION HISTORY OF THE LA AUTO SHOW PUB. 10, ISSUE 3 | GLANCDA.ORG
Business Transactions • Buy-Sell Agreements • DMV, BAR, and other governmental approvals • Lender flooring and capital loan agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations • NMV non-profit association representation Estate Planning • Succession planning for businesses • Trust Agreements including lifetime benefit trusts • Gift and Estate Tax planning Tax • Property Tax planning, audits, and appeals • Federal estate and gift tax controversy audits • EDD Audits BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations 3737 Birch Street, Suite 400, Newport Beach, California 92660 | PH: (949) 608-6900 | ferruzzo.com Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Consumer claims regarding the sale of automobiles • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisition and dispositions • Lease agreements • Lender Opinion Letters Employment Practices • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Arbitration Agreements • Employer Handbooks and Employer Compliance Procedures Ferruzzo & Ferruzzo, LLP began providing legal representation to new car and truck dealers over four decades ago. Over the course of that time, one of the central goals of the firm has been to remain rooted in our client relationships. With the strength of over 25 attorneys, we provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. We have practice groups in each area of the law that service the needs of you and your dealership.
LOS ANGELES | SAN DIEGO | SACRAMENTO | SAN FRANCISCO | scalirasmussen.com Avoiding litigation when it’s possible. Protecting you when it isn’t. •Labor & Employment •Regulatory & Licensing •Complex Litigation •General Counsel Services •Mergers & Acquisitions AV® and AV Preeminent® are Certification Marks used under license in accordance with the Martindale-Hubbell® certification procedures, standards and policies.
Originally founded in 1907, the Greater Los Angeles New Car Dealers Association provides valuable educational and philanthropic benefits to the Los Angeles Community. The Association believes that involvement with local charitable organizations makes a positive difference for everyone involved. We are GLANCDA PRESIDENT Howard Tenenbaum Keyes Automotive Group VICE PRESIDENT Jeanne Brewer Acura of Glendale SECRETARY/TREASURER Evan Ellis Fiat and Alfa Romeo of Glendale IMMEDIATE PAST PRESIDENT David Ellis Ellis Family Stores - Glendale GLANCDA DIRECTORS Tim Smith Pete Smith Ian Thomas Robb Hernandez Matt Browning Brad Mugg Rinaldi Halim GLANCDA BOARD OF DIRECTORS ©2023 Greater Los Angeles New Car Dealers Association | The newsLINK Group, LLC. All rights reserved. Los Angeles Dealer is published four times each year by The newsLINK Group, LLC for GLANCDA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and dealer 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 GLANCDA, 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. Los Angeles Dealer is a collective work, and as such, some articles are submitted by authors who are independent of GLANCDA. While GLANCDA 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. 06 | President’s Message Driving Our Industry Forward By Howard Tenenbaum, President 08 | History of the LA Auto Show 12 | County (CUPA) Inspector Coming: Are You Ready? By Sam Celly, BChE MChE, JD CSP, Celly Services, Inc. 14 | Ask Alison California Will Eliminate the State Disability Wage Cap in 2024 By Alison McCallum, EPIC Insurance Brokers and Consultants 16 | Ways to Increase Your Service Department Traffic 21 | Dealerships Must Use New Form I-9 Beginning November 1 By Matt Simpson, Fisher Phillips 24 | Partnerships Help Dealers Succeed By Sharon Kitzman, Dominion DMS 28 | Positioning for the Future of EV Market Growth 30 | New Website Allows Consumers To Lodge Privacy Violation Complaints Online By One S. Choi, Associate, Scali Rasmussen PC 700 North Central Avenue, Suite 320 Glendale, CA 91203 213-748-0243 | fax 213-748-0245 4
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PRESIDENT’S MESSAGE Howard Tenenbaum GLANCDA President Driving Our Industry Forward Dear members, I am pleased to announce that the Los Angeles Auto Show is just around the corner! Running from November 17-26, this event is a must-attend for all car enthusiasts and industry professionals. As a member of GLANCDA, you have the opportunity to receive 25 complimentary any-day tickets to the show. This is a fantastic way for both your customers and employees to witness the latest and greatest new cars in the marketplace. The Los Angeles Auto Show is renowned for showcasing cutting-edge technology, innovative designs, and the most exciting advancements in the automotive industry. It provides a platform for manufacturers to unveil their latest models and concept cars, allowing attendees to get a firsthand look at what the future of transportation holds. Whether you are in the market for a new vehicle or simply want to stay informed about the latest trends, this event is not to be missed. In addition to the Los Angeles Auto Show, I would like to highlight the ongoing legislative and workforce development efforts that GLANCDA is undertaking on behalf of all our dealer members. We are actively working to address the challenges and opportunities that arise in our industry, ensuring that our members are well-equipped to navigate the ever-changing landscape. Through our advocacy efforts, we strive to create a favorable business environment that supports the growth and success of our dealerships. I encourage all members to keep an eye open for upcoming events and opportunities, as well as our informative Zoom and webinar briefings. These sessions provide valuable insights into industry trends, best practices, and strategies for success. We are committed to providing our members with the resources and knowledge they need to thrive in today’s competitive market. Thank you for your continued support and participation in GLANCDA. Together, we can drive our industry forward and achieve new heights of success. I look forward to seeing you at the Los Angeles Auto Show and at our future events. Sincerely, Howard 6
Auto shows connect automakers with consumers, which translates into sales. Auto shows have always provided a great opportunity for car buyers and enthusiasts to see, touch and test drive the latest new automobiles. After the past few years, with the pandemic moving most of the car buying experience online, consumers are ready to experience the possibility of a new car in person. There’s only so much a consumer can get online, even though dealers did a pretty good job of adjusting to the online shopping world. The direct-to-consumer experience that auto shows provide ensures that events like the LA Auto Show have a bright and vibrant future. Most people don’t carve out time to visit a dealership until they're well into the buying process. Spending a day with the family, wandering a large convention center is a fun and easy way to figure out what the next family car might be or to dream about someday owning a sports car or off-road vehicle. Now, more than ever, auto shows have become a relevant part of the car buying experience. Since the first LA Auto Show in 1907, GLANCDA, formerly known as the Licensed Motor Car Dealers Association of Los Angeles and the Los Angeles Motor Car Dealers Association, has been a sponsor and proud supporter of the annual event. The show and its 116-year history is steeped in tradition and community involvement and has thrived, in part, because of strong partnerships like the one that GLANCDA shares with LA Auto Show HISTORY OF THE 8
it today. To understand the importance of the show to the LA community, one must go back to the beginning. In 1907, the first-ever LA Auto Show had 99 vehicles on display at Marley’s Skating Rink. As the show grew in popularity, venues changed to accommodate crowds, and the community looked forward to the annual event with great anticipation. Then, in 1929, tragedy struck. A massive fire broke out and destroyed the entire venue, causing over one million dollars in damage. With the help of the association and the community, the show opened one day later at Shrine Stadium. The quick actions of all parties sent a clear message — The LA Auto Show must go on! In the 1940s, with World War II raging, the LA Auto Show went on hiatus. It came back with great excitement in 1952. The re-opening of the LA Auto Show was held at the Pan Pacific Auditorium with 152 vehicles on display. The return of our soldiers from war brought great interest in European cars, and the number of imports on display grew. The LA Auto Show became an international phenomenon. The 1960s brought Japanese automobiles to the showroom floor along with a need for more space and to accommodate the crowds. By the 1980s, 87.2% of American households owned at least one vehicle, 51.5% owned more than one. Car ownership was accessible to most, with the average price for a new car being $7,000 and gas being around $0.90 a gallon. Americans had truly become auto-dependent. The LA Auto hit a stride that carried it forward to where it is today. With the rapid transition to zeroemission vehicles, a wave of new and exciting announcements from automakers will be unveiled at this year's auto show. The incredible array of new models are a must-see for car enthusiasts. The following companies will be showcasing and debuting at the upcoming LA Auto Show. • Acura • Aston Martin • Cadillac • Chevrolet • Chrysler • Dodge • Fiat • Ford • Genesis • Honda • Hyundai • Jaguar • Jeep • Kia • Land Rover • Lexus • Lincoln • Lucid • Mazda • Nissan • Pebble • Polestar • Porsche • Ram • Subaru • Toyota • Verge • Volkswagen • Volvo We hope to see you this year at the LA Auto Show, Nov. 17‑26, 2023, at the LA Convention Center. Please visit laautoshow.com to learn more. 9
Contact us today to place your announcement ad Who to congratulate , who to acknowledge , and who to thank for a job well done . Employees are motivated when they are recognized and feel valued. The Los Angeles Dealer magazine is a great platform to celebrate your team's accomplishments! 10
Background In 1993, CalEPA created the Certified Unified Program Agency (CUPA) which is a local agency certified by CalEPA to implement and enforce six state hazardous waste and hazardous materials regulatory management programs. CUPA inspectors enforce hazardous waste, storage tank and emergency preparedness regulations, amongst others. In our observation, the enforcement level varies from county to county and even inspector to inspector; however, the level of enforcement is up significantly, with many paying penalties for violations. We discuss some recent CUPA violations issued via a Notice of Violations (NOV). Needless to say, any NOV issued must be abated within the stipulated time and the county inspector must be informed in writing. As part of the preparation for the annual CUPA inspector visit, we have noted some common CUPA violations. We will discuss this during our visit to clients as well. Dealership management must go through the listed items below and undertake remedial steps. Common CUPA inspection items are as follows: California Environmental Reporting System (CERS): All facilities with hazmat in excess of 55 gallons, or 200 cu. ft. of compressed gas, must report hazmat on CERS (state portal) and update annually. This reporting is similar to the federal Tier II reporting requirements but more expansive. CERS includes items as follows: • Keep inventory, facility maps and the emergency contact list with cell number to respond to a hazmat emergency, including after hours. Preferably, the contacts must be aware of hazmat and its location on the lot. Contact living close is preferable as well. • Maintain a copy of the CERS plan and ensure all managers have read the plan and know its location. • Train employees on an emergency response plan (CERS report) and seek written acknowledgment from employees. • Train employees on spill response and provide spill kits. Spill kits (multiple) must be located in the shop and in the bulk oil tank storage area, preferably yellow drums that are easily recognizable. Spill kits consist of absorbent snakes (help build a dike), absorbent pads and good old absorbent powder. Note that time is of the essence when combating oil spills. Label them in bold letters “Spill Kit,” and if the drum is not yellow, you may take a yellow can of paint and paint the lid yellow. • If the bulk oil tanks are in the shop area or in the drive area where they can be impacted by shop traffic, install bollards to protect them. Hazardous Material (and Waste) Storage Regulations: • Ensure ALL containers have lids and are labeled with their content. Ensure lids are secured on waste drums and/or fill ports on tanks are closed when not in active use. • Conduct WEEKLY inspections of hazardous waste storage areas. Keep logs for three years. Daily inspection may be necessary if the facility is subject to an SPCC plan. • Ensure drums that previously stored hazardous materials/waste are labeled "empty as of mm/dd/yyyy." Once the container is reused for hazardous waste storage, remove the empty label/sign. • Brake fluid has different characteristics than used motor oil and, as such, should be disposed of as a separate hazardous waste stream. Similarly, contaminated gasoline must be stored and disposed of separately. • Ensure waste is not stored for more than 90 days. Observe the "Accumulation Start Date" on the waste label to ensure the 90-day storage clock is not exceeded. Contact the waste hauler to dispose of waste if the 90day window is closing. Shop managers must keep the waste hauler and their rep’s phone number on their cell. County (CUPA) Inspector Coming: Are You Ready? By Sam Celly, BChE MChE, JD CSP, Celly Services, Inc. 12
• Ensure all hazardous material containers (oil quarts, coolant containers, etc.) are completely empty (drip-dry) prior to disposing in the trash. Aerosol cans, i.e., must also be completely empty. • Ensure all waste caddies are labeled for their content and disposition/disposal, i.e., “Waste Oil — Empty Daily” or “Waste Coolant — Empty Daily.” • Ensure all waste containers 55 gallons or greater have secondary containment. Also, ensure containment is kept clean. Waste Tank Structural Assessment (Title 22): Waste tanks need a structural assessment conducted by a registered Professional Engineer (PE) every five years. Facilities generating less than 1000 kg/month of waste are exempt from this requirement. Keep the tank report accessible. Spill Prevention Control & Containment Plan: Facilities with petroleum products storage exceeding 1,320 gallons must have a current Spill Prevention Control & Countermeasure Plan (SPCC). Conduct DAILY inspections of the aboveground storage tanks. Maintain log(s) for a minimum of three years for recordkeeping. The plan must be renewed every five years. Waste Disposal Paperwork (and Manifest): Maintain all waste manifests for hazardous waste pick-up docs on site for three years. When a hazardous waste manifest is generated, copy the manifest and mail the copy to DTSC Generator Manifests, Department of Toxic Substances Control, P.O. Box 400, Sacramento, CA 95812. Once a signed copy is received from the TSDF, match the signed copy to the original manifest copy. The six-page manifest is expressly required for waste streams such as contaminated gasoline and waste brake fluid. Used oil and used coolant are exempt from the six-page manifest process. To read the Hazardous Waste Manifest Information, scan the QR code. https://dtsc.ca.gov/hazardous-waste-manifest-information Universal Waste Considerations Common Universal Waste: Includes any electronic device that is hazardous waste, such as computers, televisions, VCRs, stereos, copiers and fax machines. Other wastes such as household-type batteries, electric lamps, non-empty aerosol cans, cathode ray tubes and mercury switches are considered universal waste. Federal Exemptions: In 2011, the U.S. EPA created an exemption for businesses that generate a combination of hazardous waste (Resource Conservation and Recovery Act [RCRA] wastes) and universal waste in an amount of less than 100 kg/month. California has enacted regulations that require all facilities, without any exemptions, to recycle all universal waste. Key Personnel Service Manager: The Service Manager and other managers must be on top of environmental issues that arise in CUPA inspections. It is critical to establish processes as follows: • What are the duties of the management staff regarding hazardous waste compliance? • Who completed training on hazmat (including an annual refresher) and emergency response, and where are the documents maintained? Where is it kept for easy access? • Facility Inspection: The Service Manager or another department manager must accompany the inspector on the annual walk-through. Notice of Violations (NOV), if any are issued, must be corrected in the established time frame. Who is responsible for completing the tasks noted on violations? The penalties occur when the NOV goes unanswered. Some dealerships change managers often, and new managers fail to address the pending violations in a timely manner. Establish a process that requires the General Manager to be copied on any violations that are handed to the dealership. The General Manager should monitor and ensure the correction of violations. CSI must be copied on the violation as well. DISCLAIMER: The contents of this newsletter are for informational purposes only and are not to be considered legal advice. Employers must consult their lawyer for legal matters and EPA/OSHA consultants for matters related to Environmental, Health & Safety. The article was authored by Sam Celly of Celly Services, Inc. who has been helping automobile dealers in Arizona, California, Hawaii, Idaho, Nevada, New Mexico, New York, Texas and Virginia comply with EPA and OSHA regulations for over 35 years. Sam is a Certified Safety Professional (No. 16515) certified by the National Board of Certified Safety Professionals. Sam received his BE (1984) and MS (1986) in Chemical Engineering, followed by a J.D. from Southwestern University School of Law (1997). Sam is a member of the American Chemical Society (No. 31176063), American Industrial Hygiene Association (No. 124715), and National Association of Dealer Counsel (NADC). Sam also serves on the Board of Orange County American Industrial Hygiene Association and on CA Industrial Hygiene Council (CIHC). Our newsletters can be accessed at www.epaoshablog.com. We welcome your comments/questions. Please send them to sam@cellyservices.com. 13
California Will Eliminate the State Disability Wage Cap in 2024 Starting in 2024, the wage cap for California State Disability Insurance (SDI) payroll deductions will be eliminated. Eliminating the wage cap will result in higher taxes and payroll deductions for individuals earning greater than $153,164 (the 2023 wage cap) per year. Background Starting in January 2024, as part of California Senate Bill 951 (SB 951), all wages earned will be subject to state disability payroll deductions. This new measure is intended to help pay for California state-mandated disability insurance, which will increase the average weekly wage replacement to between 63% and 90% (varying on an individual’s average weekly wage) starting on Jan. 1, 2025. To fund the increased benefit amount, the state is removing the wage cap on contributions to the state insurance disability fund, effective Jan. 1, 2024. With the California SDI wage ceiling eliminated, high-earning employees ($153,164 for 2023) will face higher payroll taxes. To mitigate the increased tax impact, employers have the option to offer voluntary disability insurance (VDI) to replace state disability insurance. For certain employee populations, a VDI plan can be less expensive than the state plan, allowing employers to pass on lower tax contribution rates and/or wage ceilings (subject to approval). Employees not impacted by SB 951 will also see the value of a lower contribution percentage, increased benefits and seamless administrative integration. The table below shows the payroll tax impact on individuals earning greater than $153,164 next year. California State Disability Insurance The California SDI program provides short-term Disability Insurance (DI) and Paid Family Leave (PFL) wage replacement benefits to eligible workers who need time off work. Employers with employees working in California may participate in the state plan or apply for approval to provide a voluntary plan to employees. Employees may be eligible for SDI if they are unable to work due to a non-work-related illness or injury, pregnancy or childbirth. To be eligible, individuals must be employed or actively looking for work at the time the disability begins and have earned at least $300 from which disability insurance deductions were withheld during the base period. Benefits for the state plan are funded through employee payroll deductions at a rate of 0.9% in 2023. The taxable wage limit in 2023 is $153,164 with a maximum annual withholding for an employee being $1,378.48. Starting in 2024, the taxable wage limit maximum cap for payroll deductions will be eliminated, meaning that all wages will be subject to the 2024 contribution rate with no annual maximum. The 2024 contribution rate has not been announced and may be less than, equal to or greater than 0.9%. Employee Earnings $100,000 $200,000 $300,000 $400,000 2023 Contributions $900 $1,378 $1,378 $1,378 2024 Contributions* $900 $1,800 $2,700 $3,600 Difference $0 $422 $1,322 $2,222 *Assuming the contribution percentage remains 0.9% Ask Alison By Alison McCallum, EPIC Insurance Brokers and Consultants 14
Voluntary Disability Plans Employers may offer a state-approved voluntary plan (VDI) to employees instead of State Disability Insurance. Voluntary programs must meet a specific set of requirements and be approved by the California Employment Development Department (EDD). VDI program requirements include: • Written approval from the majority of employees eligible for coverage • Cannot cost employees more than SDI • Provide all the same benefits as SDI plus at least one that is better • Allow employees to reject the VDI plan and choose SDI coverage • Covered employees must be given a written document that outlines their benefits • Must be offered to all eligible California employees of the employer. A separate program must be maintained for each FEIN with employees in California. • Must be updated to match any increase in benefits that SDI implements because of legislation or approved regulation The EDD will first grant conditional approval, pending submission of a security deposit based on the amount of the employer’s previous year’s taxable wages and the annual payroll deduction percentage (0.9% in 2023). Once an employer’s VDI is approved, they are no longer required to send state disability payroll deductions to the state, but rather the funds should be placed in a separate trust fund to pay their employees’ disability and paid family leave claims. An assessment paid to the state based on employees’ taxable wage amount is still required annually. Next Steps for Employers Work with your EPIC team to determine if a VDI plan is a good fit for your organization/employees: • Do you have a highly-paid workforce that will be adversely affected by the removal of the wage cap on SDI contributions? • Is your disability and PFL incidence rate low that would allow for a lower contribution rate or wage cap than SDI? • Is your company prepared to assist in funding the VDI plan in the event employee contributions are not sufficient to pay claims and administrative costs, especially in the early years? • Are you working with an STD claims administrator that can also manage a VDI plan or will you need to find a new or separate vendor? • Is your benefits/financial team equipped to take on the additional administrative and financial reporting responsibilities required by the EDD? • Does your company operate under a single FEIN within California? Employers with multiple FEINs must maintain separate plans for each FEIN including separate bonds and bank accounts. If you would like more information on this change, EPIC will provide details to GLANCDA members. EPIC ranks among the top 15 retail insurance brokers in the United States and is the largest insurer of auto dealers in the state. Alison McCallum has been in the employee benefits industry for over 20 years and personally works with more than 60 Southern California Dealerships. She is a Principal with EPIC Insurance Brokers and Consultants, the CNCDA’s only licensed employee benefits broker. With this partnership, EPIC offers unique dealership expertise and services available to GLANCDA dealer members at no cost. If you have questions or would like further information, please feel free to contact her at (949) 417-9136 or alison.mccallum@epicbrokers.com. 15
Ways to Increase Your Service Department Traffic Although your parts and service departments are fixed operations, there are ways to increase traffic and, ultimately, your net profit. The first and most obvious one is keeping expenses down. That could be worth a separate article, but assuming you’ve already done that, the next step is to increase net profit by focusing on creating new business. There are several ways to accomplish this. You could focus on the profit margins for labor and parts sales, increase the number of sales per repair order or increase your repair order count. This article is about the last option, a fancy way of saying you should increase foot traffic. Examine Capacity Challenges We would all like to think that the pandemic is behind us; however, pandemic-related consequences continue. The shutdown prevented many people from maintaining their vehicles on time, and many owners are still playing catchup. The auto parts supply chain is still dealing with shortages, thanks partly to a brittle and arguably too-long path between the factory and the service department and partly to shutdowns 16
and employee shortages. Currently, there aren’t enough loaner cars because many businesses sold off their fleets to generate needed income and haven’t been able to replace them. Thanks to labor shortages, some auto dealership service departments are understaffed. These are problems you can’t always solve at the dealership level, although many experts are working to remedy them. The J.D. Power 2022 U.S. Customer Service Index Study was released March 9, 2023. It contained some interesting information. For example, wait times for service appointments have increased. It now takes approximately 5.6 days for premium cars one-to-three years old and 4.8 days for massmarket vehicles one-to-three years old. That’s an increase of almost two full days. According to the report, delays are due to the increasing volume of EVs being serviced resulting in the first customer satisfaction decline in nearly 30 years. Why not take that hard truth and make it work for you? Now is the time to stand out from the crowd. Most dealerships work hard for a positive relationship with their customers. People who view the dealership warmly and know from first-hand experience how much it does for its customers and the community will react well when you need patience from them. Friends are good to friends. As the market continues to shift toward EVs, be aware that there’s an opportunity for better service. According to the J.D. Power study, people who own gas- or diesel-powered vehicles marked their overall service satisfaction at 852. For EV owners, it was only 784. Remember, many of those EVs are Teslas coming out of gigafactories in California, Nevada and New York. A lower satisfaction rating might indicate that Tesla’s customers are missing the service they used to get from dealership service departments. Never underestimate the power of keeping customers happy. Communicate Surprisingly, the survey found that communicating with customers keeps them happy. Customer satisfaction improves if service departments are proactive about communication and send texts or emails about unresolved problems. If a dealership problem affects customers, consider being preemptive about it and reassure them that you are working hard to resolve the issues. Increase Productivity Finding technicians without enough to go around can take some creativity. Focus on the following: treat techs well, consider hiring more diversely, and take an interest in programs at local schools. Do what you can to create a pipeline, hire more women and minorities, mentor young techs and help create satisfying career paths for them. Master techs are great, but you don’t need a master tech for every job. Instead, hire “B” and “C” level techs to handle repairs and maintenance. You can increase the work capacity that your service shop has by hiring just one tech. In turn, having one more tech reduces the customer wait time and can generally increase gross profit by about $10,000 per month. Even if you focus on hiring less-experienced techs, they will, in most cases, improve their skills over time. Schedule Appointments Get customers into the shop as soon as possible by scheduling an appointment for them when they call. For the dealership to be as competitive as possible, the appointment must be that day or the next. Until a tech looks at the problem, you can’t expect to provide them with an accurate diagnosis. And, if customers can’t get their vehicle into the shop immediately, they may call the aftermarket competition. Therefore, whoever handles calls — a service adviser, an appointment coordinator or someone else — should have only one primary assignment: scheduling appointments. Make Communicating Easier Many technology channels have made it much easier to communicate with customers than ever before. Set things up so people can make appointments online or through an app. Ease payments by putting that online, too. Send text messages and videos about repair work. People like getting a video or photo that shows them repair work to be done, and when you send some photographic evidence to them, they are three times more likely to agree to the work. Use Valets or Send Technicians People have always liked personalized service. Be willing to send a valet to collect a vehicle. Alternatively, send a technician to the vehicle’s location. Owners who use valet or mobile service rated their overall higher in customer satisfaction. Call No-Shows No-shows are a fact of life. People get busy, and they forget what they’ve scheduled. However, there’s a lot you can do to reduce the number of no-shows. Send a confirmation text Never underestimate the power of keeping customers happy. 17
when someone makes an appointment and a final one on or before the appointment day. If a customer doesn’t show up despite the text messages, have someone call them to reschedule. Follow Up on Special Order Parts Sometimes repairs can’t be made until an ordered part arrives. You may send the customer a postcard to let them know the part came in, but don’t stop there. Someone from the dealership should also call the customer to make an appointment. Too many dealerships don’t follow up with customers about parts orders. As a result, they sometimes have a large inventory of never-installed obsolete parts. Try to get the parts installed on the vehicles that prompted the order as much as possible. Make Routine Service Appointments When customers come in for an appointment, you ideally want them to return later for routine maintenance. Talk with customers about the next required maintenance and give them the option of making their next service appointment before they leave. The appointment can be time- or mileage-based. If you implement these strategies, the repair order count may increase by at least 10%. If the service department normally performs 400 repairs a month, after hiring a new tech and increasing the dealership’s focus on following up, the number could increase to 440. In a year, the extra 40 repairs per month could add up to 480 repairs. And the extra money will head straight to your bottom line. EPIC is proud of its partnership with more than 300 California dealerships and is the CNCDA’s only licensed broker for Health Insurance and Workers’ Compensation. As the dealers’ consultant, experience what EPIC can do for you today, including: • A team producing real results and decades of experience with dealerships and their specific needs • Proprietary Workers’ Compensation and specific insurance products tailored for dealerships • Full compliance, along with audit and claims management EPICBROKERS.COM ©2023 Edgewood Partners Insurance Center. All rights reserved. | CA License: 0B29370 LEARN MORE ABOUT OUR SERVICES BY CONTACTING: Alison McCallum (949) 422-6431 alison.mccallum@epicbrokers.com Eric Kitei (949) 228-2779 eric.kitei@epicbrokers.com 18
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1067 Park View Drive | Covina, CA 91724 | (626) 858-5100 | Fax (626) 332-7012 YOUR SUCCESS... IS OUR SUCCESS ➢ Committed to our Dealer Clients for over 40 Years ➢ Helping to Optimize your Business Operations ➢ Providing the Highest Quality Tax and Accounting Services ➢ Consulting & Management Support ➢ Estate Planning & Dealer Succession Opportunities George R. Applebaum, CPA Shareholder (626) 858-5100, ext. 215 gapplebaum@rogersclem.com Scott M. Biehl, CPA Managing Shareholder (626) 858-5100, ext. 229 sbiehl@rogersclem.com Andy R. Jones, CPA Shareholder (626) 858-5100, ext. 237 ajones@rogersclem.com
and links to information on automatic extensions of employment authorization documentation; and • Added a box that eligible employers must check if the employee’s Form I-9 documentation was examined under a DHS-authorized alternative procedure rather than via physical examination. DHS also reduced the length of the Form I-9 Instructions from 15 pages to eight pages and streamlined the steps each actor takes to complete their section of the form, among other changes. Qualified E-Verify Employers May Remotely Examine Form I-9 Documents Under current Form I-9 rules, employers are required to physically examine an employee’s original identity and work authorization documents. DHS has now created a separate framework to authorize alternative document examination procedures as an optional alternative to the in-person physical document examination method. The first alternative DHS authorized is an option for qualified E-Verify employers to remotely examine identity and work authorization documents beginning on August 1. Qualified E-Verify employers are those employers who are in good Federal immigration officials just made critical changes to modernize the I-9 employment verification process. The new Form I-9 was made available for employers to use beginning August 1, and all employers must use the new form by November 1. Here are best practices for compliance, given the new rules soon in effect. DHS Makes Changes to the Streamlined Form I-9 The new Form I-9 has been available for dealers to use beginning August 1. However, dealers must use the new form by November 1. The full list of DHS’s changes include: • Reduced Sections 1 and 2 to a single-sided page by merging some fields; • Moved the Section 1 Preparer/Translator Certification area to a separate, standalone Supplement A that employers can provide to employees if needed; • Ensured the form can be filled out on tablets and mobile devices; • Ensured the form can be downloaded easily and removed the requirement to enter “N/A” in certain fields; • Revised the Lists of Acceptable Documents page to include some acceptable receipts, as well as guidance Dealerships Must Use New Form I-9 Beginning November 1 By Matt Simpson, Fisher Phillips 21
standing with E-Verify, have enrolled in E-Verify with respect to all hiring sites that use the alternative procedure and comply with all E-Verify requirements. If a qualified employer chooses to offer the alternative procedure to new employees at an E-Verify hiring site, they must do so consistently for all employees at that site. However, dealers may choose to offer the alternative procedure for remote hires only and continue to apply physical examination procedures to all employees who work onsite or in a hybrid capacity, so long as they do not adopt such a practice for a discriminatory purpose or treat employees differently based on their citizenship, immigration status, or national origin. A qualified E-Verify employer may continue to examine documents physically instead of remotely. Additionally, dealers must allow employees who are unable or unwilling to submit documentation using the alternative procedure to submit documentation for physical examination. Requirements of the Alternative Document Review Procedure Within three business days of an employee’s first day of employment, a qualified E-Verify employer (or an authorized representative acting on the employer’s behalf) who chooses to use the alternative procedure must: • Examine copies (front and back, if the document is twosided) of Form I-9 documents or an acceptable receipt to ensure that the documentation presented reasonably appears to be genuine; • Conduct a live video interaction with the individual presenting the document(s) to ensure that the documentation reasonably appears to be genuine and related to the individual. The employee must first transmit a copy of the document(s) to the employer (per Step 1 above) and then present the same document(s) during the live video interaction; • Indicate on the Form I-9, by completing the corresponding box, that an alternative procedure was used to examine documentation to complete Section 2 or for reverification, as applicable; • Retain a clear and legible copy of the documentation (front and back, if the documentation is two-sided); and • Create an E-Verify case if the employee is a new hire. DHS Provides Relief for Certain Employers Enrolled in E-Verify During COVID-19 Flexibilities Perhaps the most significant development is the alternative solution DHS is now offering qualified employers who were left with an arduous task of bringing in all the employees they hired remotely during the COVID-19 pandemic to review their original documents and annotate their I-9s by the upcoming August 30 deadline. Qualified E-Verify employers can use the alternative procedure to satisfy the required physical examination of an employee’s documents for that Form I-9 if the dealer: • Was enrolled in E-Verify at the time they performed a remote examination of an employee’s Form I-9 documentation for Section 2 or reverification while using the COVID-19 flexibilities; • Created an E-Verify case for that employee (except for reverification); and • Performed the remote inspection between March 20, 2020 and July 31, 2023. These dealers should not create a new case in E-Verify. All qualified employers that use the alternative procedure instead of physical examination as described above must follow the steps of the alternative procedure and add “alternative procedure” with the date of examination (meaning the date the employer performed a live video interaction as required under the alternative procedure) to the Section 2 Additional Information field on the Form I-9 or in Section 3, as appropriate. 22
Get compliant. Protect your bottom line. We make it simple for dealerships to navigate compliance With a combined 95 years of environmental health and safety compliance experience in automotive operations across the country, our Certified Safety Professionals (CSP) can help you reduce risk and increase profits. Permits and registrations — BAR, EPA, DIR Specialized employee training upon request from your dealership Online training program (elearning) Environmental Protection Agency compliance and environmental risk management DOT hazmat shipping certification Workplace health and safety compliance Environmental health and safety training Why choose us? Training We’ll help find a solution that works for you LET’S TALK! www.cellyservices.com 562.704.4000
Partnerships Help Dealers Succeed By Sharon Kitzman, Dominion DMS Ideally, vendors and businesses work together as partners. Having a genuine relationship and being able to problemsolve together is an advantage no matter what. The auto business is not exempt. Dealerships have done well during the last couple of years. But there’s a downside to good times: dealerships sometimes develop bad habits because it becomes so easy to wait for customers to come to them instead of going out and finding new ones. Without leadership and a good plan, teams can fall apart quickly. As John C. Maxwell said, “Teamwork makes the dream work, but the vision becomes a nightmare when the leader has a big dream and a bad team.” Having a vendor as an ally in business can play a crucial role in the success or failure of an organization. Organizations should work to strengthen their vendor relationships in the same manner that they focus on team development and fostering customer loyalty. Once your goals are set and your vendor has committed to working with you, it’s important to maximize the relationships so you continue to get the most out of your tools. Here’s how to keep relationships going so you see the best results: Team Training and Support Working with vendors to come up with a well-thoughtout training plan for your team helps with integrating new products into your dealership. At times, it can be hard to implement new tools because daily routines are set, and everyone is pressed for time. That’s why it’s important to work closely with your vendor to set your team up for success. When possible, bring in a vendor representative to train and educate your employees. 24
That way, everyone understands how to use the new product. Key Performance Indicators (KPIs) Vendors should provide you with KPIs. KPIs create targets for your teams to hit, milestones to track progress, and insights to help organizations make better decisions. Using feedback from KPIs will help you to continually improve performance. Communication Set up regular check-ins with vendors to talk about what’s working and what’s not. This is where you can get the help you need. A receptive vendor will use your feedback to improve its product, so be honest. It is also important to establish open channels of communication for your team to ensure everyone using the vendor tools knows how to get help if they need it. Long-Term Training Training is not simply finished after the initial setup. Follow-up training from your vendor is important because it allows your team to give feedback, get questions answered and allows for training as the product develops new features. You’ll keep your staff engaged and maximize the value of your dealership tools. A good vendor is there to help you achieve your goals, so make sure to stay on the same page, keep your communication going, and continue to look for ways tools can benefit your dealership. Having a great relationship with a vendor who has a vested interest in your business can prove to be beneficial in a number of ways: Cost Savings Being a good customer — with consistent orders and on-time payments — can lead to vendors offering volume discounts and having special deals. Timely Deliveries In order for you to meet your obligations and provide excellent customer service, you need to have the tools you need delivered on time. That’s what’s great about having a good relationship with your vendor, they will prioritize you. Vendors will deliver the goods ahead of time. In addition, they’ll make sure that you get the best training and will follow up. Vendor Support When issues arise, the vendor will be prompt in their responses. More than likely, they’ll go beyond the basics to address your problem and compensate you for your trouble. Customization As your vendor begins to understand your business, they can provide you with unique and customized products that can create a competitive advantage over other businesses in the marketplace. Customer Satisfaction A strong relationship with your vendor can also impact other relationships, that of your customers and your company. When you deliver goods and services on time and free from issues, your customer relationships will become stronger. This can foster loyalty and trust as they will feel that their money is well-spent. There is more to consider. Recent trends in the auto industry are affecting dealerships, and dealers will have to adapt. What are some of those changes? You already know about an increase in EV sales, but specifics are harder to find. How many will be built, and where will they be distributed? When will the national charging infrastructure become a reality? Additionally, what are the next steps in putting digital technology into evermore-connected cars? How will tech partnerships with auto manufacturers affect product offerings and sales strategies, including the market for accessories? Also, what progress is being made on autonomous cars? Will interest rates continue to rise? How will that affect the drop in used car prices as market conditions stabilize and supply chains return to normal? What about the regulatory environment? Major changes in finance, insurance and lending have all taken place. How will dealers create a consistent sales experience for customers? Will 25
they refine multi-channel coordinated marketing? Will they go to Gen Z’s current search engine favorite, TikTok? As the market changes, finding lowhanging fruit may be more difficult. Establishing and maintaining solid vendor relationships is vital. Now is the right time to return to selling basics — focusing on customer service while maintaining cost efficiency, quality and developing your market are key. That means using your DMS to give you the information about customers you need. NADA keeps statistics about many aspects of the auto business, but one of those statistics has to do with inventory. About 2% of the people in a dealer database return to the market every month, but that doesn’t mean they return to the dealership where they bought their last car. Very few customers are loyal to a specific dealer, but a good DMS can help you to identify helpful information about customers: When was the last time they did business, did they buy or lease? Pay cash? Buy insurance? What was their payment range? How do you track your customers who aren’t coming back to your dealership? The technology is now there to know when customers visit other dealers. Dealers can use that information to determine why their customers are going elsewhere and possibly find ways to bring them back. Google Analytics (GA3) made way for a unified GA4 specification written by the Automotive Standards Council, due in November 2023. Also, you can look forward to tracking across all vendors and outcome-oriented conversion signals that replace clicks. With the pandemic over and concerns about disease fading, how is shared mobility developing? We know fewer people are currently buying new automobiles. Of those who do, they don’t often have much equity in their old one. Will younger people continue to avoid buying or driving cars, or will they finally decide that getting a license and having a car is worth the time and money? What will happen to the subscription-based services manufacturers are experimenting with? Some people are coming in to return leased vehicles and walking out with a substantial check instead of another leased vehicle. If fewer people are buying automobiles, that also means there are fewer used automobiles. Optimizing revenue streams has become critical to staying in business. Dealers and vendor partners both benefit from communicating ideas and solutions for the problems they see. It’s easy to spend time on administrative tasks instead of building relationships and talking with business partners is as important as any other task. Maximizing your vendor relationships will increase your return on your technology investments and keep your dealership ahead of the curve. Finding a balance is key. Sharon Kitzman leads the launch and long-term growth of Dominion DMS. Previously, she managed the strategic direction and product development for Reynolds & Reynolds and Dealertrack. Her experience spans every area of dealership software development, including sales, marketing, product lifecycle management, process re-engineering, OEM management, professional services, and customer services. Kitzman is a recognized leader in the automotive industry for her expertise in DMS technology. She received numerous accolades for her leadership, including Automotive News Top 100 Leading Women 2015 and 2020, Auto Remarketing Women in Retail 2021, and AutoSuccess Women at the Wheel 2021. She has a Bachelor of Business Administration from Ohio State University. Listen to our VUE Points podcast to stay up to date with news and current events related to the automotive software and retail industry. https://www.dominiondms.com/podcasts/ 26
The Fisher Phillips Automotive Dealership Team has represented automobile and other vehicle dealers and dealer groups nationwide for over half a century. When you call us for advice, you instantly tap into decades of experience dealing with your industry and the resources of a firm exclusively devoted to labor and employment law. You won’t have to explain what F&I managers do or how service technicians are paid. Our long and close association with the retail automobile industry uniquely positions us to help you solve your employee problems with minimal disruption. Workplace Solutions for Employers 444 South Flower Street, Suite 1500, Los Angeles, CA 90071 213.330.4500 fisherphillips.com ONE LAST THING ... Did you know that you can enjoy your association news anytime, anywhere? Scan the QR code or visit: los-angeles-dealer.thenewslinkgroup.org Check it out! The new online article build-outs allow you to: • Stay up to date with the latest association news • Share your favorite articles to social channels • Email articles to friends or colleagues There is still a flipping book for those of you who prefer swiping and a downloadable PDF. 27
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