GENERATOR THE ISSUE 1., 2022 A PUBLICATION OF THE GEORGIA AUTOMOBILE DEALERS ASSOCIATION 2022 GADA CONVENTION Page 10 Page 17 EV CUSTOMER of Tomorrow How to Prepare Today for the
Running a dealership comes with its share of uncertain terrain. But one thing is certain. Our Dealer Financial Services team is dedicated to being by your side with the resources, solutions and vision to see you through. Jim Yager jim.yager@bofa.com 770.774.4660 business.bofa.com/dealer Making business easier for auto dealers. Especially now. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4826555 08-22-0145 Running a dealership comes with its share of uncertain terrain. But one thing is certain. Our Dealer Financial Services team is dedicated to being by your side ith the resources, solutions and vision to see you throug . Jim Yager jim.yager@bofa.com 770.774. 6 0 business.bofa.com/dealer Making business easier for auto dealers. Especiall . “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4826555 08-22-0145
GADA BOARD OF DIRECTORS EXECUTIVE COMMITTEE ISSUE 1., 2022 TABLE OF CONTENTS THE Lehman Franklin Chair Charles Prater Chair-Elect Bo Scott Secretary/Treasurer William Strickland Immediate Past Chair Matthew Laughridge North Georgia Area Vice Chair Jimmy Ellis West Georgia Area Vice Chair ©2022 The Georgia Automobile Dealers Association is proud to present The Generator as a benefit of membership in the association. No member dues were used in the publishing of this news magazine. All publishing costs were borne by advertising sales. Purchase of any products or services from paid advertisements within this magazine are the sole responsibility of the consumer. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of The Georgia Automobile Dealers Association or its publisher, The newsLINK Group, LLC. Any legal advice should be regarded as general information. It is strongly recommended that one contact an attorney for counsel regarding specific circumstances. Likewise, the appearance of advertisers does not constitute an endorsement of the products or services featured by The newsLINK Group, LLC. 4 Spotlight on 2022-2023 GADA Chairman Lehman Franklin III: A life of Adventure and Service 7 On My Mind 8 2022 GADA Convention Sponsors 10 2022 GADA Convention Highlights 14 Message from NADA Chairman FTC Safeguards December 9 Compliance Deadline Fast Approaching 15 Headlights on the Law Updated Safeguards Rule: Dealers Must Comply by December 9, 2022 17 Insurance Insights Employee Benefits - Navigating the System and Making the Best Decisions 18 How to Prepare Today for the EV Customer of Tomorrow 22 Combating Catalytic Converter Theft 24 Fisher Phillips Insights: Five Ways to Attract and Retain Qualified Workers 26 The Ins and Outs of Dealership Communication 30 Georgia Auto Outlook 2022 District 1 Jason Denson Matt Laughridge Charles Prater District 2 Justin Fuller Bill Holt Bill Howell District 3 William Bridges Michael Domenicone Jimmy Ellis Ted Hayes Ernest Hodge Austin Pugmire Ryan Regnier Bo Scott Valery Voyles District 4 Trey Dettmering Wanda Howell William Strickland District 5 Bill Gibbs David Jones Wesley Middlebrooks District 6 Jessica Clayton Emanuel Jones Dana Mccracken District 7 Marsh Butler Jim Jackson Tim Redding, Jr. District 8 David Flowers Forest Hutchinson Al Park District 9 Mike Burch Mark Howell Chip O’Steen District 10 Lehman Franklin Chad Nesmith Spencer Thomas Heavy Trucks Director Rick Reynolds Public Group Representative Mike Sullivan Marsh Butler East Central Area Vice Chair David Flowers Southwest Area Vice Chair Chad NeSmith Southeast Area Vice Chair Steve Middlebrooks NADA Director GEORGIA AUTOMOBILE DEALERS ASSOCIATION 2060 Powers Ferry Road SE, Atlanta, GA 30339 (770) 432-1658 www.gada.com Lea Kirschner, GADA President & CEO Michael Alford, 2022 NADA Chairman Shawn Presnell, GADA Managing Director of Insurance Services Dominion DMS Ben Jordan, GADA General Counsel & Director of Governmental Relations
Lehman Franklin III started a yearlong term as chair of the Georgia Automobile Dealers Association Board July 1, 2022. He has been a board member since 2015 and served previously as secretary and treasurer. He is the general manager at the Franklin Chevrolet, Buick, GMC and Toyota dealership and vice president of the Franklin Automotive Group, and he is running unopposed as a state representative in Georgia. Lehman and his wife, Lorie, have farm animals and honeybee hives to take care of. Someday they hope to have children, too. GADA recently interviewed Lehman about his life, a few of his adventures and his work. The following is a recap of our conversation. Please tell us about your education at the Citadel Military College and your master’s degree in business administration at Georgia Southern University. Why those degrees? I knew the Citadel was the best school for me after attending one of their orientation weekends. The Citadel taught me not to be afraid to tackle difficult things. I also learned about servant leadership, which became my life’s driving force. I chose business because I had always had a strong business background within my family. A business degree also left more options open to me. As for my MBA, my rationale was that a master’s degree might open up more opportunities for me. SPOTLIGHT ON 2022-2023 GADA CHAIRMAN LEHMAN FRANKLIN III: A Life of Adventure and Service THE GENERATOR 4
What was the most important thing you learned during your years of education? My education taught me how to find information, ask questions or challenge thoughts, get things done on a timeline, and how and why to work in a team. I discovered the difference between being intelligent and having wisdom. While earning your master’s degree, you managed a motel. How did you find that job, and why did you decide to leave it? My father owned The Budget Inn property, a very lowend motel in one of the worst areas of Savannah. In fact, the place was robbed five times during the five years I worked there. We knew we needed it to turn around, make it profitable and establish good management. I had no experience, but I learned what I needed to. Working at the motel was a great experience for me. It opened my eyes to poverty and the difficulties of climbing out of it. We turned things around, accomplished our goal, and then I left. Please tell us about your experience while serving a four-year mission in Argentina. I purchased a 30-foot Bristol sailboat to live on in Savannah because I could not afford to purchase or rent in a decent area. After preparing the boat, paying it off and saving money, I quit my job and sailed to Central America. I ended up in Honduras and met a YWAM (Youth With a Mission) team from Norway doing their outreach in Honduras. My engine needed repairs, so I stayed with them for about a month. I helped them work with prisons, orphanages, homeless people, churches and so on, and I decided to continue doing that work in Argentina. I took teams to almost every South and Central American country. During that time, I developed or built on my concept of service and how beautiful that is, what true authority looks like, and how you don’t truly know a people until you can speak their language. (I speak Spanish and can understand Italian and Portuguese, but I have difficulty speaking them.) Please tell us about Marine Reach Ministries. What did you do as the captain and ministry director during your four-year term there? I missed the sea when I was in Argentina and wanted to establish a ministry working with ships and the sea. Long story short, I left Argentina for Sweden. We bought a ship there, established Marine Reach, and I became the ship’s captain and the ministry director. We would come alongside other established Mediterranean ministries or nonprofits and volunteer to help them. Are you still involved with Marine Reach Ministries? What are they currently doing? No. The work transitioned to training others to serve on ships or other places. The actual ship I was on was sold and ended up in Savannah, Georgia, to get some work done on it. Please tell us about living on the Mediterranean Sea. It was a great experience. I minored in European history because I love history, and the Mediterranean is full of it. It was amazing to read about Mediterranean-based history while I was there. That was a bonus. How long has your family been in the automotive dealership business? My grandfather started the business in 1940 with the Chevy store. We got the Toyota store in 1976 and currently have General Motors Corp. brands (Chevy, Buick and GMC). We had Cadillacs until a few months ago but sold that line back to the OEM. My father and uncle grew up in the business, and I have a cousin who has done nothing but this. What experience did you have working at a dealership before you became the general manager? I started selling cars when I returned home. I moved into F&I, was a closer, worked at the sales desk, was a service manager, worked in accounting and so on. I’ve done everything except parts. I also attended NADA’s dealer school somewhere along the line. How did you become both the general manager and vice president of the Franklin Automotive Group? We have two locations, Toyota and GM. I was working as vice president and spending most of my time at the Chevy store, but I was unhappy with how the Toyota store was run. I replaced that GM with another one who didn’t work out and decided to manage it myself until we could find the right person. We never did. You’ve been on the board of GADA since 2015. Why is GADA membership important? It’s a great place to learn from other older, wiser dealers. More importantly, GADA does a service that too many Georgia dealers take for granted. Our industry can be volatile, and without GADA’s watchful eye, things can Continued on page 6 ISSUE 1., 2022 5
change drastically, making it difficult or impossible to satisfy the customer and offer the best, honest and most competitive environment. What would you say to encourage someone in the industry to become a GADA member? You will get more out of it than what you put into it. You already have plenty to do. Please tell us why you decided to run for office. I truly believe in a life of service before self, and I want to improve our world and community. What do you hope to achieve as a state representative? What are your main goals while in office? My main goal is to serve the constituents of District 160 with integrity to the best of my ability. My background and business orientation place me uniquely to serve in a way others might not be able to. I want to substantially improve the standard of living for those in District 160 and make it a much better place to live and raise a family. How will being a representative impact your day-today work? Being a representative can be very demanding. However, I love the car business and will always be 100% involved in it. My incredible staff makes it possible to periodically step away from the store and serve in the General Assembly from January through March. Serving would be impossible without them. You are the new chair for GADA. What are the biggest problems facing the dealership industry in Georgia? Where do you want to focus your attention during the coming year? I will focus on education, which has always been one of the greatest challenges. The dealer franchise system is a tremendous growth engine. Many people don’t know how much the automobile industry affects our local communities and how much it benefits small-town America. ► Continued from page 5 THE GENERATOR 6
ON MY During the 1970s recession, my dad, a salesman by nature, worked at several jobs, one of which was a car salesman at Johnson Ford in Kingston, New York. I recall that he loved the job and the daily exposure to the incomparable “new car smell.” Eventually, however, as the economy improved, he returned to his true calling as a haberdasher, selling suits at a local menswear store, Rafalowsky’s. Rafalowsky’s was owned and operated by the Rafalowsky family, and later, when they retired, my dad purchased the store. I grew up around Rafalowsky’s, and one thing I distinctly remember is the connection my father had with his customers and his community. Connection. I think a lot about this word as we advocate for the survival of a system of local dealers. The franchised dealer model has many benefits. I would sum them up as the “4 C’s” – Competition, Convenience, Community and Connection. Connection is the key ingredient that makes the local dealer customer experience superior. A recent study performed by Pied Piper, a privately owned research firm that uses mystery shoppers to determine a Prospect Satisfaction Index, supports this conclusion. From July 2021 to June 2022, Pied Piper conducted a customer satisfaction survey covering 25 premium auto manufacturers and collecting over 1,650 measurements in categories such as salesperson attentiveness, availability of finance options and responsiveness to online inquiries. The top five ranked manufacturers utilize the franchise system, while the lowest scorers were direct sale manufacturers that reject the franchised model and instead keep the entire customer experience within their control. Moreover, the study demonstrated that as the popularity of EVs sold by these direct-to-consumer manufacturers increases, the customer experience declines. Since 2019, Tesla’s overall score fell by 22%. Specifically, measurements related to whether Tesla salespeople explained at home and EV network charging fell by a combined 34%. To summarize, directto-consumer sellers fail miserably in the area of customer service. It seems direct-to-consumer manufacturers may know how to build connected cars but don’t know anything about connecting with customers. On the other hand, franchised dealers can offer both a convenient, streamlined method of online shopping as well as attentive customer service. We are a connected society. Yes, that means something very different than it did back in the 70s, but ultimately, there is still and will always be, a need to connect on a personal level. Franchised dealers live and work in the communities where they sell and service their products. Dealers want to connect with their customers and strive to do so every day. Speaking of connections, and repetition aside, it is extremely important for dealers to initiate contact and stay connected to local lawmakers. Get involved in grassroots. Invite a legislator to visit your dealership to see your employees in action. If you need assistance with an introduction or setting up a visit, GADA is here to help — contact legislative@gada.com. ► MIND Connection is the key ingredient that makes the local dealer customer experience superior. Lea Kirschner, GADA President & CEO ISSUE 1., 2022 7
2022 GADA CONVENTION SPONSORS A special thank you to all of our 2022 GADA Convention Sponsors – without you, this event would not be possible. We look forward to seeing you next year! American Fidelity ally Cox Automotive Assurant DLRdmv Solera/ Automate/ DealerSocket/ TitleTec NADA Retirement Bank of America Broadway Equipment Company CDK GLOBAL DDI Technology Dealer Solutions Mergers and Acquisitions Dealerslink Dominion Dealer Service Guardian Products Henderson Hutcherson & McCullough Hussey Gay Bell Lotlinx Truist Zurich Capital Automotive Dixon Hughes Goodman Gill Automotive Group Ross Lane & Company, LLC Trinity Accounting Group Wells Fargo Commercial Auto BRONZE LEVEL SPONSORS SILVER LEVEL SPONSORS GOLD LEVEL SPONSORS DIAMOND LEVEL SPONSORS TITANIUM LEVEL SPONSORS THE GENERATOR 8
We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 Truist Financial Corporation, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC.
The 2022 GADA Convention was held June 9-12 at the Cloister at Sea Island. Attendees enjoyed many networking opportunities, informative business sessions, fun social events and so much more! A big thanks to all of our sponsors and exhibitors who make the convention possible. We hope to see you at our next event. For more information, please visit www.gada.com/upcoming-events. 2022 GADA 2021-2022 GADA Chair William Strickland and Convention Chair Wanda Howell and her husband Lee Howell open the Convention with ribbon cutting. Mackenzie Baines from Cox Automotive presents to dealers about EV emerging technologies. Left to right: Governor Brian Kemp, First Lady Marty Kemp, Lorie Franklin and 2022-2023 GADA Chair Lehman Franklin Braves Hall of Famer Dale Murphy Jayson Imrie and John Penrod from Titanium Sponsor, DLRdmv CONVENTION HIGHLIGHTS THE GENERATOR 10
GADA Workers Compensation Board of Trustees hard at work in the “G8 room.” 2022-2023 GADA Chair Lehman Franklin & 2021-2022 GADA Chair William Strickland. NADA Chairman Mike Alford speaking to the crowd. Left to right: President Pro Tempore and dealer Butch Miller, Sheree Ralston and Speaker of the House David Ralston Left to right: Rep. Harold Jones, Lori Prince, Rep. Brian Prince, Juanita Baranco, Greg Baranco, and House Minority Leader James Beverly ISSUE 1., 2022 11
Left to right: Convention Chair Wanda Howell, Lee Howell, Senate Minority Leader Gloria Butler, Rep. Nan Orrock Left to right: John Absher, Billie Absher, Rich Stein and Dennis Alexander from Titanium Sponsor, Assurant Left to right: GADA Past Chair Wyndi Damato, Todd Damato, First Lady Marty Kemp, Governor Brian Kemp, Beth Howell, and board member Mark Howell Left to right: 2021-2022 GADA Chair William Strickland, Governor Brian Kemp, First Lady Marty Kemp and GADA President Emeritus Bill Morie THE GENERATOR 12
Left to right: GADA Past Chair Billy Fortson, Stephanie Fortson, 2021-2022 GADA Chair William Strickland and Pam Strickland Left to right: GADA Area Vice Chair Matt Laughridge, Dale Murphy and Terry Reid Laughridge Rich Sox and Jason Allen from Bass Sox & Mercer presenting to attendees. House Speaker David Ralston speaking to the Board of Directors Left to right: GADA Board member Wesley Middlebrooks, Claire Middlebrooks, Courtney Middlebrooks, Caroline Middlebrooks, Susan Middlebrooks and NADA Director Steve Middlebrooks ISSUE 1., 2022 13
FTC Safeguards December 9 Compliance Deadline Fast Approaching MESSAGE FROM NADA CHAIRMAN There has never been a more exciting time to be a part of the auto retail industry. For many of us, including myself, the changing dayto-day is what keeps us engaged and interested in coming to work every day. Some of the changes we deal with on a regular basis make our businesses stronger and make our customers happier, but some changes, including those mandated by the federal government, add tenuous requirements to our daily operating procedures and negatively impact our ability to serve our customers. One such issue that is particularly timely is the Federal Trade Commission (FTC) Safeguards Rule, which was amended in 2021. The Rule mandates a significant number of new and expanded technical and systems requirements that financial institutions, including dealers, must implement to meet their information security obligations regardless of an organization or dealership size. The FTC provides insights into the requirements in their guidance publication, FTC Safeguards Rule: What Your Business Needs to Know. As of December 9, 2022, all dealers must be in compliance with the amended Rule. In response to NADA’s input, the FTC made significant changes and provided clarity to the Rule, but many of the amendments in the final rule require dealerships to adopt significant new information security measures. While the heat of the summer makes December feel very far off, dealers should begin to lay the foundation for their compliance strategy. Luckily, NADA has a number of member resources to get you started, including a set of FAQs, several webinars (including A Dealer’s Solution for the Revised Safeguards Rule and The Amended FTC Safeguards Rule - Overview and Update), and a comprehensive and updated Driven Guide, A Dealer Guide to the FTC Safeguards Rule containing extensive templates, exhibits, IT guidance and more. In addition, there was a webinar held Tuesday, July 26, with an FTC attorney that you should not miss, where you can hear the FTC answer dealer questions directly. Visit www.nada.org to watch the video. These materials can serve as informational resources for you, your legal counsel, and your IT compliance experts as you take steps to ensure compliance by the FTC’s deadline. Please don’t wait to focus on this new Rule. We all have a number of issues we are handling on behalf of our businesses, but this is not a Rule you can comply with overnight, it takes some time. Get started NOW on this important compliance deadline – it cannot wait! ► Note: This article is offered for general informational purposes only and is not intended to constitute legal advice. Each dealer should seek their own legal counsel and make their own independent business decisions and work with their attorneys and IT consultants to ensure compliance. Michael Alford, 2022 NADA Chairman THE GENERATOR 14
Franchise dealers face a variety of challenges in the current automobile market – the transition to electrification, supply chain constraints on vehicles and parts, inflation, rising interest rates, digital retailing, workforce development and an increase in catalytic converter theft – just to name a few. As if those challenges are not enough, another requires immediate attention by GADA members: compliance with the FTC’s Updated Safeguards Rule. The Safeguards Rule has been in effect for nearly 20 years. A federal data security rule requires financial institutions, including dealers, to have measures in place (“safeguards”) to keep customer information secure. The original rule currently requires dealers to develop a system for safeguarding customer data but allows dealers flexibility in determining the size and scope of that system based on a dealer’s individual circumstances. However, the new rule puts several additional requirements on businesses. Why did the FTC update the Safeguards Rule? There have been several high-profile data breaches in recent years. The updated Safeguards Rule puts the onus on businesses to do more to prevent future breaches. When does the updated Safeguards Rule take effect? While some parts of the Safeguards Rule have already taken effect, many of the requirements take effect on Dec. 9, 2022. Dealers must be in compliance by then. What does the updated Safeguards Rule require? A comprehensive analysis of the Rule’s many requirements is beyond the scope of this bulletin (and the author’s expertise). By way of a brief synopsis, the updates Rule requires dealers to: • Designate a qualified individual or service provider to oversee and implement an information security program; • Perform a data systems inventory – essentially an assessment of all systems, including not just DMS and CRM but also websites, computers, cell phones and vehicles in inventory; • Prepare a Written Risk Assessment periodically that categorizes security risks, assesses the adequacy of existing controls on information systems considering those risks, and details how the dealership will manage and mitigate those risks; • Develop a Written Information Security Plan that must ensure the security and confidentiality of customer information, protect against anticipated threats or hazards to the security or integrity of the system, and protect against unauthorized access to or use of customer information; • Prepare a Written Incident Response Plan to enable the company to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity or availability of customer information; and • Submit Written Reports to the Board of Directors or Senior Leadership of the dealership regarding the information security program and compliance. In addition, dealers must implement technical requirements such as encryption, multi-factor authentication, system monitoring, penetration testing and vulnerability testing. Dealers must also develop procedures for monitoring access to and controls of customer information for secure utilization of software programs, disposing of old customer information; and maintaining system integrity through personnel changes. And dealers are further required to train their employees on these new responsibilities and monitor service providers who can access dealership systems to ensure their compliance. If that all sounds daunting and expensive, it likely will be. But an ounce of prevention is worth more than a pound of the cure, as the old saying goes. The potential costs of not complying include fines of over $46,000 per violation; a loss of cyber insurance; civil liability; harm to the business operations; and reputation. What Should You Do to Prepare? Several resources are available to assist dealers with compliance. HEADLIGHTS ON THE LAW Continued on page 16 UPDATED SAFEGUARDS RULE: Dealers Must Comply by December 9, 2022 Ben Jordan, GADA General Counsel & Director of Governmental Relations ISSUE 1., 2022 15
GADA Services recently partnered with ComplyAuto to help dealers implement these requirements. ComplyAuto conducted a webinar in August and GADA members were encouraged to attend. ComplyAuto’s website is located at https:// complyauto.com. In addition, NADA has developed materials and resources to help dealers understand their new obligations, including webinars, a set of FAQs, an Overview and Update and a Dealer Guide to the Updated FTC Safeguards Rule. These resources contain very useful information, and they are available to NADA members on NADA’s website at nada.org. ► Several resources are available to assist dealers with compliance. GADA Services recently partnered with ComplyAuto to help dealers implement these requirements. MEMBER SPOTLIGHT INFORMATION REQUESTED! We want to celebrate you and all the good work you do! We would love to see and learn more about the efforts you make to give back to your local communities. Please send any photos and descriptions of ways in which your dealership has given back to your local community for a chance to be included in our ongoing Member Spotlight to legislative@gada.com. Continued from page 15 This article is for informational purposes only and is not intended to be legal advice. Dealers are advised to seek advice from dealership legal counsel or other competent professionals concerning individual dealership operations. The presentation of this article is not intended to encourage concerted action among competitors or any other action on the part of dealers that would in any manner fix or stabilize the price or any element of the price of any good or service. THE GENERATOR 16
Educate Employees • By educating your employees in certain aspects of healthcare, they can become better consumers of healthcare. Controlling Prescription Drug (RX) Costs • Brand name medications vs. generic: Generic medications can cost up to 85% less than their brand name equivalent. Keep in mind that generic drugs are heavily regulated and undergo a rigorous review process before approval. The FDA tests them to ensure they offer the same benefits as brand name medications. Studies have shown that 87% of the time, the generic medication was equally as effective as its brand name equivalent. Outpatient Imaging or Testing Costs • The cost of outpatient imaging or testing can vary significantly depending on where the test is completed. The most expensive testing is typically in an outpatient setting at a hospital. This is an area where most people decide to have their imaging or testing done where their doctor writes the order. If the imaging is done at a hospital, the cost can be anywhere from two to three times the cost of what it would cost at a stand-alone imaging center. Employees must do investigation work upfront prior to having imaging or testing done. Most stand-alone imaging centers can send your results to your doctor or provide them directly to you. Consider offering HSA (health saving account) as your low-cost plan • HSA or consumer-driven health plans are a great way to engage your employees in understanding health care costs and driving their consumer behavior to save money on health care expenses. Employees participating in HSA health plans are more likely to be cost-effective when spending health care dollars. This can keep your overall claims costs down and impact better rate stability. Important Underwriting Factors in Group Health Insurance • Participation is a very important factor in underwriting health insurance. No matter the size, employer participation in your health plan is extremely important. It is important to keep participation in your group health plan as high as possible and not allow it to go under 50% of the total employees or 75% of eligible employees, not including those with a valid waiver. Most insurance companies will add a participation load to your rates if your participation drops below these levels. Many insurers will not provide a health quote for employers under these participation levels. • It is not to your advantage to switch health insurance companies too often. One of the questions underwriters will ask is how many insurance companies you have been with the past five years. Two is okay, but more than two may limit who will provide a quote. • Employer Contribution plays a vital role in your rates. Our analysis of benefit clients shows that those who contribute more toward “employee only” for health insurance have higher participation, which helps keep overall rates down. • Telehealth benefits and overall benefit education can plan a major role in keeping claims costs down and impact lower medical loss ratios! Did You Know? • Did you know that GADA has an in-house insurance agency specializing in employee benefits? We would be happy to discuss your employee benefit challenges to determine if we can provide better solutions. Our goal is to provide the most competitive costs, top customer service and keep our benefits clients informed. ► Navigating the System and Making the Best Decisions EMPLOYEE BENEFITS – INSURANCE INSIGHTS Shawn Presnell, Managing Director of Insurance Services Shawn Presnell, Managing Director of Insurance, at 770-432-1658 x240, or shawnp@gada.com; and Amber Ryan, Benefits Specialist, 770-432-1658 x241, or at amber_ryan@gada.com. PLEASE CONTACT US IF WE CAN HELP ANSWER ANY SPECIFIC INSURANCE QUESTIONS: ISSUE 1., 2022 17
HOW TO PREPARE TODAY FOR THE EV Customer of Tomorrow Vehicles powered by electricity aren’t a new thing. Some experts have said the first ones were developed as early as 1828-1832. A British inventor named Robert Anderson displayed another prototype in 1835 at an industry conference. In the late 1880s, a chemist named William Morrison fitted a carriage with a battery. The carriage could carry 12 people and travel about 20 mph. When automobiles began replacing horse-drawn vehicles between 1880 and 1914, their power was provided in three different ways: steam (40%), electricity (38%) and gas (22%). Steam proved to be impractical. Drivers had to wait 45 minutes before they could start driving, and they needed to be refilled continuously with water. But even though Thomas Edison and Henry Ford worked on building an EV, gasoline won the three-way race. Gasoline had been discovered in Texas and was easier to provide to rural areas than electricity, which tended to be limited to cities. Also, Henry Ford’s assembly line proved itself as an efficient way to build gas-powered vehicles. Until the 1970s, when the U.S. began experiencing high prices and shortages, gas-powered engines dominated the market. People wanted to be less dependent on imported oil, especially after the 1973 Arab Oil Embargo. However, a limited driving range and slow top speeds were a problem. The Toyota Prius was released in Japan in 1997, then worldwide in 2000. Martin Eberhard and Marc Tarpenning (not Elon Musk) started Tesla Motors in 2003; Elon became the board chair in 2004 and the fourth CEO in 2008. The Nissan LEAF debuted in 2010. Lithium battery costs declined 97% between 1991 and the end of 2021. Unsurprisingly, people have been predicting the advent of EVs for a long time. But the time of high expectations combined with a lessthan-overwhelming market share is ending. Kristen Balasia, VP of Consulting Services at S&P Global,1 says choices among commercially available EVs have already grown exponentially. It now looks like the U.S. EV market will be much bigger by the decade’s end and that the mainstream brands will be making about 90% of EVs by 2030. The government is pushing EVs hard. The budget for national EV charging networks is $5 billion. An executive order signed by President Biden mandates 100% zero-emissions vehicle acquisitions. The deadline for that is 2035. Many people want the entire U.S. to be carbon neutral by 2050. How fast will the transition be? Most new car owners keep their vehicles for about six years because they want to keep up-to-date with the latest features, but in June 2021, the average length of ownership had extended to 11.9 years. That makes sense; the cost of a new vehicle is high, loans take years to repay, and it’s a smart strategy to continue driving what you have until the need for repairs changes your mind. Dealers can expect to provide conventional auto services for at least another decade, but the balance in 10 years will still have shifted dramatically. That’s why dealers who want to continue selling vehicles will THE GENERATOR 18
Association, the Sierra Club and EVHybridNoire. The event has been around for more than a decade and is held in all 50 states. This year is the 12th year. The people who attend are thinking about buying EVs of all varieties. Organizers welcome dealers. There probably isn’t a better way to find many potential customers in one spot. You have the chance to meet them and make a good impression on them. That’s great advertising. Now is also the time to start looking at customer profiles. Since EVs do have to be charged, you have the chance to think through their needs. Homeowners can charge at home. People who don’t have easy access to electricity at home may want to know where charging stations are, especially at restaurants and shopping areas. Let them know where they can plug in their vehicle and then do something else while the battery charges. If someone has spent a lot of time in your service shop, maybe you can talk to them about the new level of reliability that occurs when there aren’t as many moving parts. Stay ahead of the curve. The future will continue to be good for dealers who are ready for it. ► more and more over time; since most shops don’t fix EVs, you can add a revenue stream if you can help your staff get the certifications they need now. You may lose business without those certifications. Your team can still work on vital components, fluids, brakes and tires. Eventually, you can add working on EV motors and replacing batteries. Despite the expense, you don’t have to do everything at once. Take the time to prioritize. Maximize the money you spend by choosing improvements carefully. The direct-sales manufacturing companies have not invested in the service side as much as they probably should have. Neglecting service is a strategic mistake and, therefore, your opportunity. EVs may need less service than conventional vehicles because they have fewer parts, but “less service” is not the same as “no service.” You may eventually change your emphasis as a business, but customers will still need service, and there will still be money to be made. All the preparation in the world won’t help you if people don’t know about it. How can you let them know? One effective way is to attend National Drive Electric Week 2022, scheduled this year for Sept. 23, 2022-Oct. 2, 2022. It is a collaboration between Plug In America, the Electric Vehicle want to transition to selling EVs. Then they can position their dealerships for tomorrow’s EV customers. The good news is that you have time. But don’t wait to get started; a lot of preparation will need to occur. What needs to happen? First is training, education and infrastructure investment. You will want EV buyers to view your dealership as a place that has EV experts and offers them important resources, even though you will continue to service conventional gasengine vehicles. It would be smart to hire an EV expert who can answer questions for customers. The expert should know as much as someone at any store using the direct-sales model, including knowing which benefits are available and which ones stack. Federal, state, local or utility incentives are all potentially available. Talk to an electrician and the local electricity supplier; you will need more electricity and more electrical infrastructure, so find out what that means in specific terms. You may need new transformers and electrical equipment. Investing in charging stations is also a good idea, as well as thinking about what you need to do to provide service for EVs. Charging stations are expensive, but they will get used even if you only install one or two at a time. Put at least one in the service area. If a technician is working on an EV, the technician can charge the vehicle while it is being serviced. Little things make a big impact on customers. You may need to upgrade tools and machinery so that everything is compatible. That’s a challenge, certainly, but be strategic about it. Can you work out something with a fellow dealer who has the same problem? Another issue is battery storage. You may need to store batteries in a separate room or another building. Batteries can start fires. Don’t skimp on safety. Technicians will need in-depth training. EV certifications will matter EVs may need less service than conventional vehicles because they have fewer parts, but “less service” is not the same as “no service.” 1S&P Global completed its acquisition of IHS Markit Feb. 28, 2022, about a year after the merger was first announced. ISSUE 1., 2022 19
20 Serving Georgia’s Franchised Motor Vehicle Dealers Contact the GADA Workers’ Comp Fund Staff for more information! Lisa Pritchett • Managing Director • (866) 646-8516 • wcfund@gada.com • Stable rates • Prompt claims management • Payroll audit coordination • Owned by dealers, staffed by GADA employees With more than three decades in service, the GADA Workers’ Compensation Fund has a solid history of stability and premium customer service. Learn why more than 400 Georgia dealerships have chosen the GADA Workers’ Compensation Fund. Contact us today. GADA Insurance Services is a full-service insurance agency that offers employee benefits coverage and property and casualty coverage to your dealership. Created in 2006 in response to member requests, your in-house insurance agency can cover the insurance needs of your business and employees. EMPLOYEE BENEFITS COVERAGE INCLUDES: • Group Dental Plans • Vision Care Plans • Customized Life Insurance • Voluntary employee benefits plans through our long-term partnership with American Fidelity, including: - Disability - Cancer - Life Insurance - HAS & HRA - Section 125 “Cafeteria” Plan BENEFITS COMPLIANCE • ERISA compliant Wrap Documents • Online web portal for storage of benefits materials and other important documents For more information, contact Managing Director Shawn Presnell 770.432.1658 x240 | shawnp@gada.com PROPERTY & CASUALTY COVERAGE INCLUDES: COMMERCIAL (Markets include several A+ rated property & casualty insurance companies) • Dealership • Dealership-related risks • Auto inventory/Open lot PERSONAL • Homes, Boats and other personal-owned items
Since the first hybrids hit the market over 10 years ago, we have been building our expertise in all things EV. Local Georgia auto dealerships provide many benefits to EV customers: EXPERT GUIDANCE Our automobile dealers promote EV ownership by offering vehicles in a range of price points, helping customers navigate the decision-making process with confidence, and getting you behind the wheel of the EV right for you. BEHIND-THE-WHEEL SAVINGS We are local businesses dedicated to helping you get all the incentives you may qualify for. Our dealers compete in a healthy market that keeps prices fair, making EVs accessible to everyone who wants to purchase one. TRY BEFORE YOU BUY Getting inside and test-driving an EV allows you to make a more accurate and informed decision, giving you confidence when you drive your new EV off the lot! GEORGIA IN CHARGE The Georgia Automobile Dealers Association launched Georgia in Charge, a network of over 100 Georgia franchise auto dealerships committed to selling electric vehicles (EVs). Georgia in Charge dealers: Have highly trained staff and technicians with specialized EV knowledge Offer specialized perks for EV buyers Are dedicated to helping you find the right vehicle and keeping it road-ready after purchase Visit www.georgiaincharge.com to search for local dealers selling EVs and learn more about making an EV purchase. Follow us: HowWe’re Taking Charge
Combating Catalytic Converter Theft Catalytic converter thefts present a growing problem for dealers and their customers. In 2021, the National Crime Bureau estimated that more than 52,000 catalytic converters were reported as stolen, compared with 1,300 in 2018. That’s 40 times as many converters, and it doesn’t include the number of catalytic converters thefts that went unreported. If the repair cost is the size of someone’s deductible, they may not report the theft to the police or the insurance company since they will have to pay the money either way. Filing a report creates the possibility of increased insurance premiums; not filing maintains the status quo. Thieves value catalytic converters because they contain precious metals such as palladium, platinum and rhodium. The metals’ values have increased exponentially. Worse, catalytic converters are easy to steal and hard to trace. Another problem caused by catalytic converter theft is the damage when thieves cut the converters from the car. They are in a hurry and don’t care about being precise, so they often damage the oxygen sensor and may take other parts of the exhaust system, such as the muffler. That means repairs after the theft will often involve more than just replacing the catalytic converter itself. A stolen catalytic converter is usually worth $500-$600 to the thief, but replacing it costs the owner approximately $3,500. What can dealers and owners do about catalytic converter theft? They can: • Make it harder for thieves to get catalytic converters • Make it easier to trace stolen catalytic converters How do you make it harder to steal a catalytic converter? Vehicles stored outside are more vulnerable than vehicles inside a garage, so dealerships are attractive targets for thieves. One dealer installed a 7,000-volt security system around the dealership. He hasn’t had any problems since then. However, one of his customers had seven trucks. Thieves took all seven converters. It took eight weeks for replacement parts to arrive; thieves took all seven converters again one short month later. Experiences like that have made the second strategy more attractive (making it easier to trace stolen catalytic converters). In January 2022, Indiana Rep. Jim Baird introduced H.R. 6394, the Preventing Auto Recycling Theft (PART) Act, which NADA strongly supports. The bill is intended to increase traceability and enforcement. A day later, Jan. 14, 2022, it was referred to the Subcommittee on Highways and Transit. It still has to pass the House and Senate, so it is a long way from being signed into law by the president. THE GENERATOR 22
If the bill passes, the idea would be to use a $7 million grant program to cover the cost of stamping VINS or other identifiers onto existing vehicles’ catalytic converters. The vehicle owner wouldn’t have to pay anything for this to be done. Dealers would also be able to use the grant program. Ideally, the grant takes care of the vehicles already on the road. The bill would also require new vehicles to stamp unique, traceable numbers on catalytic converters when vehicles are built to identify an individual converter. Purchasers would have to keep records of these numbers. Catalytic converter theft, sale, trafficking or purchase (if the buyer knows the converter was stolen) would be a federal crime. Someone convicted under this law could spend up to five years in jail. In May 2022, 14 trade associations, other industry organizations and NADA asked Congress to take up H.R. 6394 and get it moving. The signers specifically asked Congress to send it to the House Energy and Commerce Committee for a hearing. If you have dealt with catalytic converter theft, you know how important this issue is. Now is the time to reach out to your representative and ask them to support H.R. 6394. It wouldn’t hurt to communicate with committee members, too. The chair is New Jersey’s Rep. Frank Pallone, Jr., and the ranking member is Washington’s Cathy McMorris Rodgers. For a full list of committee members, visit https://energycommerce.house.gov/ subcommittees/energy-and-commerce-117th-congress. We can help Congress and, later, the Senate understand how important this issue is, but we will only be successful if we put in the effort. ► On-Site & Off-Site Title Clerk Staffing Same or Next Day Turnaround Reduce Title Clerk Costs Full Time Coverage | No Down Time Reduce Late reas Tanya Vartanian ISSUE 1., 2022 23
Labor shortages are not new to the dealership industry. Dealers have known for years that they have to be creative to attract all types of employees, from technicians to salespeople. Unfortunately, the pandemic has enhanced workforce shortage challenges across all industries, and the automotive industry has been one of the hardest hit. A recent Fisher Phillips survey revealed that 87% of automotive employers experienced “moderate to severe” difficulty finding and retaining workers in 2021. Additionally, 28% of the survey respondents saw more women than men leave their organizations in 2021. What does this mean for dealers? Now more than ever, you must find creative yet compliant methods for recruiting and retaining qualified employees in an increasingly competitive labor market. This Insight will provide five strategies you can implement to attract and retain qualified employees. How Can Dealers Access Talent in Competitive and Creative Ways? Revisit Pay Practices. As inflation and wages increase across all industries, many dealerships are replacing their traditional, incentivebased commission pay plans for salespeople with more secure plans that guarantee pay. Consider Flexible Scheduling Opportunities and Related Benefits. The pandemic has changed how we work. Many qualified applicants are looking for opportunities with remote or flexible scheduling options. At the same time, more buyers are choosing to shop for cars online. Dealers FISHER PHILLIPS INSIGHTS: Five Ways to Attract and Retain Qualified Workers Fisher Phillips can take advantage of this trend by considering remote or flexible scheduling options for employees. Along the same lines, you may consider offering paid family leave, reduced hours, more part-time positions, and mental health benefits, such as flex days and access to therapy through health insurance. Regardless of your dealership’s size, these changes will make your company stand out from competitors by ensuring that employees, including working caregivers, have support both in and out of the workplace. Be Proactive About Changing Company Culture. As you know, employees who are dissatisfied with their work culture often look for change, even if it comes with a pay cut. Changing a company’s culture does not happen overnight and should start at the top. So, you should ensure executives and managers are leading by example, recognizing good performance, and giving employees more opportunities to provide input on workplace practices, such as scheduling. Along the same lines, executives and managers should ensure they are actively listening to employee concerns. This will help identify opportunities to make meaningful changes that are responsive to employee needs. Following through on these opportunities will help retain valued employees and attract productive new employees. Ask Current Employees to Help. Current employees who are happy at work are the best advertisements for open positions. Ask for their help in your recruiting efforts and reward those who bring successful new employees into your dealership. For example, you can give monetary rewards for referrals who are hired and stay past the probationary period. Use Technology to Your Advantage. Look for opportunities to implement technology-driven systems, such as scheduling apps and performance management tools, to make your employees’ jobs easier and more efficient. Conclusion We will monitor these developments and provide updates as warranted, so make sure that you are subscribed to Fisher Phillips’ Insights to get the most up-to-date information direct to your inbox. If you have further questions, contact your Fisher Phillips attorney, the author of this Insight, or any attorney on our Automotive Dealership Industry Team. ► For more information, please visit www.fisherphillips.com. THE GENERATOR 24
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