Pub 1 • Issue 2 The FTC’s Nationwide Ban on Non-Compete Agreements Official Publication of the Louisiana Automobile Dealers Association
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CONTENTS 6 A MESSAGE FROM THE PRESIDENT Legislative Update By Coulter McMahen, President/CEO, LADA 8 The FTC’s Nationwide Ban on Non‑Compete Agreements How Will This Affect New Car Dealers? By Jude C. Bursavich, Partner, Breazeale, Sachse & Wilson LLP 10 A New FTC Self-Reporting Requirement Means It’s Time to Check-In with the Safeguards Rule By Sunny Mayhall, The LDS Group 11 Ready to Tackle Our Dealer Issues By Gary Gilchrist, Chairman, NADA 12 8 Ways to Plan for and Prevent Heat-Related Illnesses By Toby Graham, Director of Marketing Communications, KPA 14 Climbing the Automotive Industry Ladder of Success By Sharon Kitzman, Dominion DMS 16 When Saying Less Gets You More 18 Remaining Competitive in the Car Business Professionalizing the Family‑Owned Auto Dealerships By Kendall Rawls, The Rawls Group 22 Driving Louisiana’s Economy ©2024 Louisiana Automobile Dealers Association (LADA) | The newsLINK Group LLC. All rights reserved. Up to Speed is published four times each year by The newsLINK Group LLC for the LADA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the LADA, 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. Up to Speed is a collective work, and as such, some articles are submitted by authors who are independent of the LADA. While Louisiana Automobile Dealers Association 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. 2023-2025 EXECUTIVE COMMITTEE Kristie M. Hebert Arceneaux Ford Chairwoman Patton Fritze Red River Chevrolet Vice-Chairman, District 7 Rand Alford Alford Motors Inc. Treasurer, District 15 Marshall Harper Harper Chevrolet GMC Immediate Past-Chairman Robert A. Grace Southpoint Volkswagen District 11-12 John R. Young John R. Young Chevrolet GMC District 13 Mark A. Hebert Sr. Hebert’s Town & Country Ford Lincoln NADA State Director OUR TEAM Coulter McMahen President/CEO Katherine Carver Director of Events and Communications Krystal Hudson Executive Assistant and Membership Director 4
With your help, we can clean up our roa ways. While supplies last, eep Louisiana eautiful will provide the following to participating dealerships free of charge. he campaign launche in ay! A complete roadside litter reduction campaign that is positive and inviting to your customers. A vertical anner to display in your dealership showroom supporting the campaign. Litter prevention kits distributed by the dealership to customers at the time o purchase. its will include a car litter bag, litter prevention tips, and a coaster with the litter hotline number. A digital toolkit. The tool it will include a press release template to announce your partnership, digital ads, social media graphics, and sample posts. Questions? ontact info@keeplouisiana eautiful.org. Visit keeplouisiana eautiful.org to learn more aout litter prevention. Scan to Sign Up! Supplies Are Limite . First-Come, First-Ser e . Why put the brakes on litter? Over1 million piecesof litterare on ouisiana’s roa ways. Over 9% ofroa si elitterisfrommotorists. The litterproblem costs ouisiana over$91 million eachyear. 9 % of ouisianans believe litterisa problem where theylive. The Put the ra es on itter campaign rom eep ouisiana eauti ul o ers your automobile dealership an opportunity to help reduce litter along our roadways. d
Legislative Update A MESSAGE FROM THE PRESIDENT COULTER McMAHEN, PRESIDENT/CEO, LADA The past six months have been eventful for LADA, marked by significant legislative activity and accomplishments. This year’s regular session was a general session, meaning no tax legislation could be considered. Our primary objective was to educate the 36 newly elected legislators about LADA, the franchise system and its importance in Louisiana. Additionally, we focused on defending the franchise dealer model and advocating for legislation to reduce rising insurance costs by fostering competition among insurance companies. I am pleased to report that we achieved these goals. House Bill 535, introduced by Representative Aimee Freeman, proposed allowing manufacturers of solely electric vehicles to sell directly to consumers in Louisiana, undermining our franchise system. Thanks to our efforts, including my testimony before the House Transportation Committee, the bill was defeated. Your engagement was crucial to this success, so thank you to all who contacted the committee members. House Bill 957, introduced by Representative Edmond Jordan, sought to prohibit sharing personal driver information without the driver’s express consent. This bill would have disrupted communication channels between dealerships, manufacturers, insurers and third-party vendors and imposed an onerous requirement on dealers to obtain explicit consent from consumers. Moreover, the bill could have exposed dealers to potential lawsuits if any employee failed to secure this consent. We led the opposition, and the bill was defeated. Representative Jordan subsequently introduced House Concurrent Resolution 94 to study direct-to-consumer motor vehicle sales despite clear evidence supporting the franchise model. This was a retaliatory move following the defeat of HB 957. I’m pleased to announce that the study resolution was denied a hearing and did not advance out of the House Commerce Committee. This rare outcome underscores our legislators’ recognition of the significant role our franchised dealers play in Louisiana’s economy. LADA, alongside diverse stakeholders, championed multiple legislative initiatives aimed at improving Louisiana’s insurance and legal environment. Despite some achievements, our efforts encountered significant resistance from Senate Judiciary A Committee, Governor Landry and the plaintiff attorney bar. House Bill 337, introduced by Representative Jack McFarland, repeals Louisiana’s direct-action statute and was signed by Governor Landry on May 23. Previously, Louisiana was one of only three states permitting plaintiffs to sue both the tortfeasor and the insurance company. Most states have eliminated this practice, recognizing that naming the insurance company in lawsuits often leads juries to award higher damages. Senate Bill 355, introduced by Senator Jeremy Stine, mandates disclosure of third-party litigation financing agreements to enhance transparency. Currently, funders operate without the need to disclose their agreements, leaving uncertainty about their influence on litigation decisions. Under the bill, plaintiffs must disclose all third-party litigation funding agreements upon request during discovery, akin to defendants being obligated to produce insurance policies when requested by plaintiffs. Governor Landry signed the bill into law on June 18. 6
Several other reform measures unfortunately failed due to staunch opposition. House Bill 423, by Representative Michael Melerine, aimed to revise Louisiana’s collateral source rule to allow a jury to see both the “sticker price” of the medical bill and the amount paid by the plaintiff’s healthcare insurer. The bill was vetoed by Governor Landry. House Bill 24, also introduced by Representative Melerine, aimed to repeal the presumption that links an accident directly to a plaintiff’s subsequent injuries without requiring proof of causation. This presumption disadvantages defendants in personal injury cases. Representative Melerine’s bill sought to shift the burden of proof back to the plaintiff, aligning with standards observed in other states. Senate Bill 334, by Senator Kirk Talbot, would have extended the prescriptive period for personal injury accidents from one to two years, alongside a notice provision requiring claimants to alert insurers before filing suit. Despite efforts, the bill died in the Senate Judiciary A Committee. In contrast, House Bill 315, by Representative Mike Johnson, extended the time period for filing personal injury lawsuits to two years without similar notice provisions. Despite opposition from the business community, Governor Landry signed the bill into law on June 3. Looking ahead, Governor Landry is considering convening another special session in late July and early August to address constitutional revisions despite resistance from the Senate this past session. He argues that unlocking restricted funds within the constitution would grant the legislature greater latitude in allocating state budget resources. The fiscal 2025 regular session is set to begin on Monday, April 14, 2025, and will adjourn on Thursday, June 12, 2025. This session holds the potential for substantial reforms to Louisiana’s tax exemptions, credits, exclusions and other incentives. It is imperative that we maintain a vigilant and proactive stance to ensure the protection of our interests. While the session primarily focuses on fiscal issues, legislators can propose up to five bills addressing broader concerns. I intend to engage with the board, the legislative task force, dealers across the state and colleagues from other states to understand the issues that concern you. Through these dialogues, we will formulate a definitive set of legislative priorities for the upcoming session. Thank you once again for your active engagement throughout this session. Together, we are always stronger, and your involvement is the key to our collective success. 7
The FTC’s Nationwide Ban on Non-Compete Agreements How Will This Affect New Car Dealers? On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule, by a 3-2 vote, banning non-compete agreements nationwide. The rule, once effective, bans all non-compete agreements between employers and employees. Existing non-compete agreements for most employees will also no longer be enforceable. Only those existing agreements with senior executives, who are earning greater than $151,164 annually and who are in policy-making positions, are excluded from the ban. The final rule becomes effective 120 days after publication in the federal register. The final rule is already facing significant legal challenges. Various business groups, including the U.S. Chamber of Commerce, filed suit in Texas Federal Court, arguing that the FTC lacks authority to issue rules regulating unfair competition. Various other legal challenges are expected, which may further delay or bar altogether the FTC’s enforcement of its final rule. Even if the FTC’s final rule remains intact after intense judicial scrutiny, much of the Louisiana law on non-compete agreements will remain unaffected. Non-compete law in Louisiana is governed by a single statute, La. R.S. 23:921. This provision presumes non-compete agreements are unenforceable unless they meet one of eight narrowly construed exceptions. Each of the exceptions is based on relationships. They include the buyer and seller of the goodwill of a business, the employer/employee relationship, the franchisor/franchisee relationship, the computer employer/computer employee relationship, the corporation/ shareholder relationship, the partner/partnership relationship in anticipation of dissolution, the partner/partnership BY JUDE C. BURSAVICH, PARTNER, BREAZEALE, SACHSE & WILSON LLP 8
01MK7923 R12/23 better with friends For life’s moments, big and small. We’re here with the strength of the cross, the protection of the shield. The Right Card. The Right Care. relationship regardless of dissolution and the limited liability/member relationship. Louisiana law already specifically prohibits a non-compete agreement between an automobile salesman and his employer that restrains him/her from selling automobiles. “Salesman” is defined in 23:921 as “any person with a salesman’s license issued by the Louisiana Motor Vehicle Commission or the Used Motor Vehicle and Parts Commission, other than a person who owns a proprietary or equity interest in a new or used car dealership in Louisiana.” The FTC’s ban obviously has no effect on that Louisiana provision. The FTC’s nationwide ban, however, does affect non-compete agreements with other employees of new car dealers, including technicians. Even if the nationwide ban goes into effect after all legal challenges, six of Louisiana’s exceptions to the general prohibition on non-compete agreements (unrelated to employees) remain unaffected by the FTC’s final rule. Moreover, Louisiana law specifically allows a non-solicitation of customers agreement between employers and employees. Such a provision allows an ex-employee to continue working in the industry but prohibits the ex-employee from soliciting customers of their former employer. This provision also appears unaffected by the FTC’s final rule. Confidentiality provisions prohibiting employees from disclosing an employer’s confidential information also remain intact after the final rule. The final rule may never become law. New car dealers should continue taking advantage of the law as it exists today until the viability of the FTC’s final rule is judicially determined, which may take years. Jude C. Bursavich is a partner in the Baton Rouge, Louisiana, office of Breazeale, Sachse & Wilson LLP. He can be reached at (225) 381-8045 (O) and/ or (225) 921-5552 (C). He has over 30 years of experience in representing businesses against former employees throughout Louisiana. 9
A New FTC Self-Reporting Requirement Means It’s Time to Check-In with the Safeguards Rule BY SUNNY MAYHALL, THE LDS GROUP T his time last year, dealerships were working to prepare for the summer deadline imposed by the Federal Trade Commission in the Amended Safeguards Rule.¹ Once June 9, 2023, passed, the FTC provided a brief reprieve before announcing in December the finalizing of the Vehicle Shopping Rule, dubbed the “Combating Auto Retail Scams Trade Regulation Rule” or the “CARS Rule.”² While the industry awaits the fate³ of the Vehicle Shopping Rule, an additional amendment to the Safeguards Rule warrants discussion. This amendment was finalized at the end of 2023 when compliance developments were focused on CARS. As of May 13, 2024, automobile dealerships are subject to a customer data breach self-reporting requirement. Specifically, under the latest edit to the Safeguards Rule, dealerships must report to the FTC “notification events.” The FTC defines a “notification event” as “… the acquisition of unencrypted customer information without the authorization of the individual to which the information pertains.”⁴ Under the amendment, notification events are limited to events involving unencrypted customer information that involve at least 500 customers.5 The amendment should prompt an assessment of whether any dealership customer information exists in unencrypted form post-June 9, 2023. The FTC allows 30 days after the discovery of the event to self-report using a notice form on the FTC website.6 Once any employee, officer or agent has knowledge of the event, the event is deemed known to the entire entity, and the clock begins to run.7 Additionally, the FTC has indicated that it will publish notification events to a public database.8 It goes without saying that publication introduces a risk of reputational harm. The FTC’s new requirement to self-report notification events comes almost one year after the deadline for having an established Information Security Program.9 As you know, the FTC is authorized to initiate enforcement actions against dealers for failing to have a compliant program.10 It’s not a stretch to consider that a self-reported notification event may give rise to a broader audit and enforcement action that looks into an entire Information Security Program.11 As we wrote last year, recent FTC activity means it’s time to check-in and self-audit. You and your compliance partner should examine dealership policies, particularly the dealership’s Incident Response Plan, and dealership training protocols. In addition to training on your customer data standards and how to communicate should a notification event occur, it’s a wise idea for dealership staff to stay current on industry-wide compliance issues. Approximately every eight weeks, the LDS Group offers an Ethics and Compliance Seminar via Zoom. Attendance is tracked during the virtual sessions, allowing dealers to receive reports. Training is not a one-and-done exercise. Repeated exposure to the pertinent issues of the day and to your dealership’s policies best positions your employees to be ready should a notification event occur. Sources 1 16 C.F.R. § 314.5. 2 FTC Vehicle Shopping Rule. https://www.nada.org/ nada/issues/ftc-vehicle-shopping-rule#:~:text=On%20 Dec.,or%20the%20%E2%80%9CCARS%20 Rule.%E2%80%9D. 3 NADA Files Federal Court Challenge to Stop FTC’s Vehicle Shopping Rule. https://www.nada.org/nada/ nada-headlines/nada-files-federal-court-challenge-stop-ftc s-vehicle-shopping-rule. 4 16 C.F.R. § 314.2(m). 5 16 C.F.R. § 314.2(m). 6 16 C.F.R. § 314.4. 7 16 C.F.R. § 314.4. 8 Federal Trade Commission Summary of the Final Rule, Section IV Detailed Analysis, p. 29. https://www.ftc.gov/ system/files/ftc_gov/pdf/p145407_safeguards_rule.pdf. 9 16 C.F.R. § 314.1, et seq. 10 NADA Management Series: Driven A Dealer Guide to the FTC Safeguards Rule, L43 (citing 15 U.S.C. § 41 et seq.). 11 Federal Trade Commission Summary of the Final Rule, Section IV Detailed Analysis, p. 9. (quoting NADA comments). https://www.ftc.gov/system/files/ftc_gov/ pdf/p145407_safeguards_rule.pdf. 10
Fellow dealers and ATAEs, During the course of 2023, while serving as NADA vice chairman, I was very fortunate to have gotten the opportunity to visit many states, and have engaged in discussions with many dealers and dealer representatives about both the national and individual state-level issues they were facing. There is no shortage of obstacles to overcome and winding rivers to navigate, but I am energized, informed and ready to tackle everything that’s before us head-on. My priorities as the 2024 NADA chairman are straightforward: 1. Continue to work with the NADA professional staff, dealers and OEMs to protect and support the franchise system. 2. Enhance dealer engagement and involvement. 3. Further strengthen the working relationship between NADA and ATAE. 4. Defend the auto retail industry against regulatory overreach. Why are these my priorities? Because dealers, NADA, ATAEs and the manufacturers are the legs of the stool upon which the entire franchise sits. And the legs of this stool must be strong and balanced to support the considerable weight the franchise system must endure, especially today. Challenges are coming at us from all different directions. In my 47 years in this business, I cannot think of a time when dealers have been pulled in so many directions and challenged on so many fronts. I want you to know our NADA staff and dealers have been continually working on each of these priorities, and many more issues simultaneously. I look at my job as doing what I can to remind everyone that we will accomplish so much more by working with one another than not. A few issues in particular will be coming to a head before we know it. In March, the Biden administration unveiled its long-awaited EV mandate. The facts on the ground do not lie. Electric inventory is climbing, and more than half of the EVs available for sale today do not qualify for the full $7,500 tax credit. The warning signs that these mandates are way ahead of consumer acceptance are everywhere. At NADA, we will continue to keep the pressure on the administration and implore them — both publicly and through ongoing face-to-face meetings — to take a pause and realize that consumer demand simply isn’t where they need it to be. We will continue to stress to them the need to look much more closely at hybrids, hydrogen and other ways we can lower emissions responsibly. We will also urge them to consider those alternative options as just as important, just as rewarding and just as critical to creating the future we all want for our kids and grandkids. NADA is also fully engaged in a campaign to stop the FTC’s Vehicle Shopping Rule from being implemented and enforced. In January, the FTC published the final version of the atrocious rule after a rushed, deeply flawed and, we believe, illegal process. The bottom line on this rule? The Vehicle Shopping Rule is simply terrible for consumers. It will add massive amounts of time, complexity, paperwork and cost to car-buying and car-shopping for tens of millions of Americans every year. And the FTC failed at every juncture to justify why these wholesale changes to the way Americans shop for and purchase new cars are necessary, or how any of these changes would benefit consumers. NADA continues to fight back against this rule with every tool in our arsenal. After the rule was published, NADA and the Texas Automobile Dealers Association filed a legal challenge in the U.S. Court of Appeals for the 5th Circuit to stay July 30, 2024, the effective date of the FTC’s Vehicle Shopping Rule. And I’m happy to report that just before the 2024 NADA Show in Las Vegas — in direct response to the legal challenge we initiated — the FTC issued a stay of its own rule, postponing the effective date of the rule pending judicial review. In addition to our legal challenge, NADA is also pursuing Congressional solutions to either nullify the rule or deny the FTC funding to enforce the Vehicle Shopping Rule. Again, we’re utilizing every tool we have at our disposal on behalf of franchised dealers. So, as you can see, we’ve got a lot on our plate. Which means YOU have a lot on your plate! So, stay involved, stay educated and stay in touch with your directors and your ATAEs. And remember that we’re in this together, which means we will be successful. Many thanks, Gary Gilchrist 2024 NADA Chairman Ready to Tackle Our Dealer Issues BY GARY GILCHRIST, CHAIRMAN, NADA 11
1 KNOW THE SIGNS There are two common kinds of heat-related illness: heat exhaustion and heatstroke. While both call for prompt action, the latter is a medical emergency. Understanding the difference may be a matter of life and death. Either of these illnesses can strike easier than you think. While people working outdoors in extreme heat are the most susceptible to heat illness, it can also affect people indoors. The radiant heat in some indoor environments — such as metal fabrication shops — can exceed outdoor temperatures. Remember that people frequently overestimate their limits and ability to continue working in the heat. They may not know they’re in trouble before it’s too late. 2 KNOW THE RISKS All of the following can factor into heat illness risk: • Current temperature and humidity. • The use (or non-use) of personal protective equipment. • The time of day. • Exertion — i.e. the activity level a task demands. • Direct sunlight/shade. Also, make sure your team is acclimated to working in the heat. 3 FAMILIARIZE YOURSELF WITH THE HEAT INDEX The NWS Heat Index is a valuable measurement tool for heat-related workforce risk. The scale ranges from 80 °F and 40% humidity (defined as the low end of “Caution”) to 110 °F and 100% humidity (far into “Extreme Danger” territory). To access the NWS Heat Index, scan the QR code. https://www.weather.gov/safety/ heat-index 4 IDENTIFY HEAT ILLNESS MANAGEMENT CONTROLS The greater the danger on the NWS Heat Index, the more protective measures employers should take. Those measures may include any or all of the following: • More time for acclimation. • Additional safety briefs. • Additional water sources. • Hydrating snacks and drinks (e.g. popsicles, sports drinks, fruit). • Periodic hydration reminders. • Additional shade (e.g. with tents). • Faster job rotation. • Mandatory sunscreen applications. • More frequent breaks. • Cooling equipment and clothing (e.g. hard hat cooling inserts and evaporative cooling vests). • Large fans. In any case, always ensure adequate medical services are available and be ready to stop and reschedule work. At certain temperatures, no task is worth the risk. 5 TAKE HUMIDITY SERIOUSLY Relative humidity is a measure of the amount of moisture in the air. Sweat does not evaporate as quickly in a moist environment as it does in a dry climate. Because evaporation of sweat from the skin is one of the ways the human body cools itself on a hot day, high humidity reduces our natural cooling potential, causing us to feel hotter. Low humidity can also be a problem for outdoor workers in hot, desert-like climates. Sweat evaporates rapidly in low humidity, leading to severe dehydration when a person doesn’t drink enough water throughout the day. 8 Ways to Plan for and Prevent Heat-Related Illnesses BY TOBY GRAHAM, DIRECTOR OF MARKETING COMMUNICATIONS, KPA 12
6 THINK INDOORS, TOO Heat illness can occur anywhere. Based on where you do business, your organization may be on the hook for indoor as well as outdoor conditions. California, for instance, is finalizing a heat illness prevention rule that would apply to indoor work areas where temperatures exceed 82 °F. Many of the same precautions as outdoor environments apply to indoor settings. Remember that architectural aspects, such as reflective shields and insulation, can impact a building’s internal temperature. 7 CREATE A HEAT ILLNESS PREVENTION TEAM Designate people within your organization as heat safety leaders. Members of the team should be responsible for reporting, monitoring conditions, managing response protocols, implementing controls at each risk level and ensuring the availability of supplies and equipment. 8 EDUCATE YOUR EMPLOYEES Employees should be trained to recognize symptoms of heat-related illnesses, what to do when symptoms are observed, and on site-specific risks and controls. In addition to their personal heat illness prevention choices, such as water intake and clothing, members of your workforce also need to be aware of their individual risk factors, including age, medications, obesity, diet, smoking habits and medical conditions. To view the Dealer Heat Illness Checklist, scan the QR code. https://info.kpa.io/auto-lada-heat-illness-checklist What will tomorrow look like? hubinternational.com Scan the QR code to learn more. It may not be what you expected. With HUB, you have a partner who is committed to supporting and protecting you, assisting to align business and personal goals to protect your profits and drive organizational vitality and resilience. Risk & Insurance | Employee Benefits | Retirement & Private Wealth David W. Alligood, Senior Vice President Office: 225-218-2410 david.alligood@hubinternational.com 13
In the auto industry, there is a gap between the number of women in leadership and those who buy cars. Maintaining that discrepancy is risky because it shows a lack of innovation when serving the market. Interestingly, women buy 62% of all vehicles today. Even if they don’t purchase directly, they influence 85% of car-buying decisions. Yet, while more women are in automotive leadership roles than ever, the statistics are still not great. According to Deloitte’s recent study, women account for 47% of the labor force but only 27% of the auto-industry workforce, even though those who do really enjoy it (Women at the Wheel study). The 330 women surveyed, also in a study by Deloitte and Automotive News, have an average tenure of 15 years at the same company and over 26 years in the industry. More than 80% are senior managers (directors, vice presidents and other C-suite occupants), and almost 60% are in marketing, sales, operations or product development. In most industries, women prefer conducting business with other women. Whether it’s their banker, doctor, lawyer, psychologist or salesperson, most women want to deal with the same gender because they feel more heard than when dealing with a man. Even though most women have done their research, they want someone who can understand them and listen. Can a man do this? Absolutely! But sometimes, women need to see another woman in the business before they will walk through the door in the first place. So why are there not more women in our industry? From the day in 1882, when Bertha Benz became the first person to complete a long-distance automobile trip, women have popularized the automobile and staged and led many noteworthy developments. There are many reasons why the auto industry fits well with women, and perhaps we all need to do a better job of highlighting those: 1. It’s a great industry for a career change. Many people find the need to switch careers, and the auto industry is an exceptional place to land. For many women looking to return to the job market after a leave of absence, the auto industry has many soft-skill jobs that offer a solid career path, from accounting to finance and beyond. Climbing the Automotive Industry Ladder of Success BY SHARON KITZMAN, DOMINION DMS 14
2. The opportunity to learn new skills. The auto industry offers a wide range of positions, each requiring specific skills to be learned and mastered. 3. A wealth of lateral job moves. Not all job moves need to go straight up. The auto industry has many opportunities that zig-zag, yet they still allow for growth. 4. Charting a career path. The auto industry offers excellent opportunities for advancement. It’s a matter of being observant, asking questions and seeking out the opportunities that arise often in most dealerships. One of the best approaches to success in the auto industry is developing a strong network of allies, mentors and good people to know. And I think there’s no better industry than the automotive industry to start your network. Most dealer principals have more than one story about the people who taught them the business and set up their career trajectory for success within the business — and they typically want to return the favor. Another great source for your network is tapping into your vendor relationships, especially if you already work in the auto industry. Strong vendor partnerships are among the greatest strategic growth tactics and best practice resources available to nearly every industry, including the auto industry. By collaborating with suppliers and vendors, within the framework of a true partner relationship, you can multiply success and profits exponentially. And the best part? Everyone benefits. Sharon Kitzman is passionate about creating and nurturing partnerships within the automotive industry and regularly discusses the many vendor products and services within the auto industry on her VUE Points podcast. Listen here: https://www.dominiondms.com/podcasts/ A genuine mutual relationship that promotes problem-solving is an advantage for profit margins and creates a more productive and engaged organization that focuses on quality outcomes. While this should be a best practice for everyone, it’s especially important to women in the auto industry. As women in the auto industry, it’s important to identify what resources you need to do your job successfully, what resources influence your job area, and what resources can further your career and connect with them. Strong vendor relationships allow you to leverage your time, and strong mentor relationships give you the inside track on how to get things done. The future of women in the auto industry is strong; it won’t remain at 27%, and that’s a good thing. Study after study has shown the importance of gender diversity in all industries, including the auto industry. Companies with diverse management teams experience 19% higher revenue and are 70% more likely to enter new markets. Furthermore, diverse teams are 12% more productive. Better still, turnover goes down 45%. In the automotive industry, where technological advances and shifting consumer demands drive rapid change, embracing diversity and inclusion has never been more crucial. 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. 15
“Less is More” is a popular phrase that has been tossed around for years, even dating back to the ancient Greeks. You may have heard it in various settings — perhaps the Minimalist Movement comes to mind. “Less is More” is a simple yet powerful concept that can greatly impact your life. The essence of the principle is this: Instead of always striving for more, sometimes focusing on less and simplifying things is better. By doing so, you can reduce stress, increase clarity and achieve greater satisfaction in your daily life. This principle can be applied to many different areas of life — from home organization to cooking and more. You wouldn’t want to ruin a nice steak by putting too much salt on it! So, why not try embracing the idea that less can sometimes be more? This premise may be more valid in the sales business than any other. We often teach salespeople that in order to excel, they need to be product-knowledge experts on each vehicle model the dealership offers. And while this is true — product knowledge can be a catalyst for growth, confidence and professional development — it must be relayed in moderation. F&I managers are also encouraged to become experts in their product, or it could reflect badly on their business. Nobody wants to be sold anything by someone who doesn’t know what they’re selling. If the salesperson or F&I manager has put forth the effort to become a product expert, they should be prepared and ready to share what they’ve learned in response to a customer’s question. The issue is that some people tend to share excessive information about a product when asked a question, instead of providing a direct answer. This can turn their extensive product knowledge into a negative rather than a positive. Whether prompted or not, sharing everything you know is usually not the best course of action. A direct response that is clear and concise trumps the volume of information just about every time. Why waste time and energy using 10 words when one will do? It takes skill, awareness and experience to know how to answer and when to stop answering. Most customers are probably not interested in the details; instead, they want their answers and they want to get on with their day. So why is it so hard for some salespeople and F&I managers to get to the point? It’s possible that they don’t have a point. Perhaps they haven’t thoughtfully considered the question and how to answer it before they start talking, or maybe they lack experience or confidence, which can lead to over-answering. People speak at about 150 words per minute but process words at about 750 words per minute. Providing too much information without getting to the point can bore your customer and come dangerously close to a lecture or history lesson nobody asked for. Over-answering can harm your credibility and erode trust, potentially resulting in a quick “No, thank you” or silence when you stop talking — which is not ideal. If salespeople and F&I managers can learn to give direct and concise answers, this can prompt customers to ask more questions. Each question can provide valuable insight into the customer’s needs and problems, which the salesperson or manager can address in a clear answer that showcases the products’ benefits and features. Remember: Speaking less leads to better listening. In sales, actively listening can be more influential than words. Effective listening gives you a better idea of how to respond, allowing for more targeted, specific, concise and direct communication. When handling a customer concern, less is more. Salespeople and F&I managers often over-empathize with the customer by offering a lengthy response, trying to show understanding or similarity with the customer’s issue. When asking for business, less is more. If a customer raises one of three common concerns — such as cost, need or urgency — offer a solution and then ask for action. The old tried-and-true method still works: “If that works, I just need your approval.” If we can learn to talk less and listen more, it will lead to more yeses from our customers. When SAYING LESS Gets You More 16
KEEPING COOL IN THE SHOP: HEAT ILLNESS PREVENTION FOR CAR DEALERSHIPS As summer temperatures are quickly approaching, it is crucial for employers to ensure all employees working, both inside and outside, are adequately protected from heat-related risks. Specific car dealership employees (e.g., salespersons, technicians, parts associates, and lot attendants) are particularly vulnerable to heat stress due to their prolonged exposure to outdoor elements. While the Occupational Safety Health Administration (OSHA) has yet to officially enact the new heat illness prevention standard, it does not mean the agency is indifferent to heat-related illnesses. The National Enforcement Initiative on Heat Illness, which relies on OSHA’s General Duty Clause authority, prioritizes heat-related inspections on days when the heat index exceeds 80 degrees Fahrenheit and applies to both indoor and outdoor workplaces. The Following Tips Can Help Employees Stay Safe During Hot Summer Months: • Know the Signs of Heat Exhaustion / Heat Stroke: Be aware of the symptoms of heat-related illnesses, such as heat exhaustion and heat stroke. Symptoms may include dizziness, headache, nausea, rapid heartbeat, and confusion. If you or a coworker experience any of these symptoms seek shade, rest, and hydrate immediately. If symptoms persist or worsen, seek medical attention immediately. • Stay Hydrated: Drink plenty of water throughout the day, even if you do not feel thirsty. Avoid sugary or caffeinated beverages, as they can contribute to dehydration. • Take Breaks: When possible, take breaks in shaded areas or indoors with air conditioning. This allows the body to cool down and prevents overheating. Employees should utilize break times to rest and recharge before returning to work. • Schedule Work Wisely: Whenever possible, schedule outdoor tasks during the cooler parts of the day, such as early morning or late afternoon. Minimize strenuous activities during peak sun hours to reduce the risk of heat-related issues. • Download the OSHA-NIOSH Heat Safety Tool App: The National Institute for Occupational Safety and Health (NIOSH) and OSHA have developed a useful App for planning outdoor work activities based on the Heat Index throughout the day. The App allows employees and managers to calculate the heat index for their location and display a risk level to workers. If your dealership has safety & health or OSHA questions, please feel free to contact Risk Management Services’ Loss Prevention Department at 1-800-351- RISK (7475) or by email: lossprevention@rmsla.com. ENDORSED BY:
Remaining Competitive in the Car Business Professionalizing the Family‑Owned Auto Dealerships BY KENDALL RAWLS, THE RAWLS GROUP THE IMPORTANCE OF PROFESSIONALISM IN FAMILY-OWNED AUTO DEALERSHIPS In the current corporate landscape, family-owned enterprises are facing challenges as they vie for success against bigger conglomerates and nationally recognized brands. In the automotive industry, where consolidation is prevalent, family-owned dealerships are under significant strain to keep pace with their larger counterparts and stay relevant. One viable solution for family-owned dealerships to gain a competitive advantage is to adopt a more professional approach to running their business. THE ROLE OF CULTURE IN FAMILY‑OWNED AUTO DEALERSHIPS Successful family-owned dealerships or auto groups often neglect formalities that can lead to problems such as nepotism, inconsistent policies, and toxic family/ business interactions. These issues can have a negative impact on performance and drive away valuable talent. Without top talent, family business owners will struggle to stay competitive, and the value of the business will decline rapidly. To remain competitive and grow the business, it is crucial to create an attractive culture that retains employees and customers while also performing well. THE UNIQUE ADVANTAGE OF FAMILY‑OWNED AUTO DEALERSHIPS At the NADA 2023 “Growth Strategies for the Family-Owned Business” workshop, Champ and Kendall Rawls discussed a unique approach for family businesses to succeed. Rawls suggested keeping the “family” aspect in a family-owned business as it can provide a competitive advantage over private and public companies. Additionally, leveraging the existing name recognition in the community can be beneficial. To achieve 18
success, it is essential to promote your dealership(s) as a local family-owned business while also incorporating the formalities of successful mega dealers and public companies. This approach can help maintain the family aspect while still achieving growth and success. STRATEGIES FOR PROFESSIONALIZING YOUR FAMILY‑OWNED AUTO DEALERSHIP Elevate the professionalism of your business by formulating, systematizing and transmitting your fundamental values. Construct a purpose statement, a future outlook and objectives and ensure that you and your team adhere to these indispensable principles. By applying this methodology, you can rest assured that your family enterprise will not only endure but also prosper. THE BENEFITS OF PROFESSIONALIZING YOUR FAMILY‑OWNED AUTO DEALERSHIP To professionalize your family business, it is advisable to develop job descriptions for all positions, identify and adhere to core values, and establish standardized processes and procedures. This approach will result in increased efficiency and effectiveness in running your business and also position your business as one that values its employees and customers, thereby standing out in your community. “Professionalizing” your family business will mitigate emotional distractions allowing your people to focus on the purpose of their positions. By professionalizing your business, you are also building value in your business, which will support your long-term growth and succession strategy. Consider the following as it relates to achieving your family and business vision. 8 STEPS FOR CREATING A GROWTH AND SUCCESSION STRATEGY 1. Determine your vision. Your vision may be to get out of day-to-day so you can focus on strategic growth and mentoring, to spend more time on hobbies and less time at work, or a combination of both. Whatever it is, it will involve some form of growth and change. • What is the WHY behind what you are doing now and what you want to be doing in the future? • Where do you see yourself in the next 5-10 years? 2. Share your vision with your trusted advisors. • Lean on expert advisors and trusted leaders to provide perspective and support based on where you want to go. Business, personal and family success is not a solo endeavor; it requires a team effort. 3. Evaluate who and what will be impacted based on where you are now and where you want to grow and transition into. • What resources do you need? • What infrastructure is required? 4. Develop a strategy with your team of advisors and key leaders to achieve your vision. • How will you develop or acquire the resources needed? • What is your one-year, two-year, three-year strategy? • Who is driving each project and how frequently will you meet to review the strategy? 19
5. Consider the possible, probable and potential issues that can impact achieving your vision such as: • Unexpected health scare or death of the owner/key leader. • Inflation, recession, supply chain, technology, political or regulatory issues. • Conflict with business partners. • Family issues influencing or impacting business decisions. • Issues with strategic vendor(s) impacting business performance. 6. Develop A, B and C plans, considering your strengths, weakness and outside opportunities and threats; so no matter what is thrown your way, you have options to fulfill your vision. 7. Lean on your team of expert advisors to educate you so you can make well-informed decisions. 8. Re-evaluate your vision and proceed where necessary through steps one through seven. Kendall Rawls knows and understands the challenges that impact the success of a family-owned business. Her unique perspective comes not only from their educational background; but, more importantly, from her experience as a second-generation family member employee of The Rawls Group — Business Succession Planners. For more information, visit seekingsuccession.com or email info@rawlsgroup.com. 20
fisherphillips.com | 36 Locations attorneys can help you steer through the labor laws affecting the car ness. Since 1943, we have been the labor lawyers of choice for mobile dealers. Fisher Phillips is dedicated to helping the members e Louisiana Automobile Dealers Association with their labor and oyment legal matters. We’re driven to help you succeed. 201 St. Charles Avenue, Suite 3710 | New Orleans, Louisiana 70170 Phone (504) 529-3834 • Fax (504) 529-3850 Timothy H. Scott tscott@fisherphillips.com Our attorneys can help you steer through the labor laws affecting the car business. Since 1943, we have been the labor lawyers of choice for automobile dealers. Fisher Phillips is dedicated to helping the members of the Louisiana Automobile Dealers Association with their labor and employment legal matters. We’re driven to help you succeed. Timothy H. Scott Partner New Orleans | Boston 504.529.3834 tscott@fisherphillips.com fisherphillips.com | 36 Lo Our attorneys can help you steer through the labor laws affecting the car business. Since 1943, we have been the labor lawyers of choice for automobile dealers. Fisher Phillips is dedicated to helping the members of the Louisiana Automobile Dealers Association with their labor and employment legal matters. We’re driven to help you succeed. 201 St. Charles Avenue, Suite 3710 | New Orleans, Louisiana 70170 Phone (504) 529-3834 • Fax (504) 529-3850 Timothy H. Scott tscott@fisherphillips.com fisherphillips.com 201 St. Charles Avenue | Suite 3710 | New Orleans, LA 70170 With almost 600 attorneys in 41 offices across the United States and Mexico, Fisher Phillips is an international labor and employment firm providing practical business solutions for employers’ workplace legal problems. FISHER PHILLIPS LLP
DRIVING LOUISIANA'S ECONOMY 55 EMPLOYEES (average per dealership) 1.3% $672M REGISTRATIONS STATE SALES TAX PAID Louisiana's Share of Total U.S. New-Vehicle Registrations LOUISIANA AUTOMOBILE DEALERS ASSOCIATION 660 Laurel Street, Suite E, Baton Rouge, LA 70802 225.769.5500 | lada@lada.org | www.lada.org $75,465 Average Employee Earnings $325M State and Federal Income Taxes Paid Includes income taxes paid for direct, indirect and induced jobs. $1.2B PAYROLL (new car) (all dealerships) (created by dealerships) Includes 15,650 direct jobs and 18,424 indirect and induced jobs. 284 DEALERSHIPS $15.1B TOTAL SALES 34,074 TOTAL JOBS $25M INVENTORY TAX PAID (all dealerships) $18M CHARITABLE CONTRIBUTIONS (all dealerships) Annual Contribution of Louisiana's LOCAL New-Car Dealers Numbers reflect annual economic activity during 2023. Sources: Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Bureau of Labor Statistics, U.S. Census Bureau 55 EMPLOYEES (average per dealership) 1.3% $672M REGISTRATIONS STATE SALES TAX PAID Louisiana's Share of Total U.S. New-Vehicle Registrations LOUISIANA AUTOMOBILE DEALERS ASSOCIATION 660 Laurel Street, Suite E, Baton Rouge, LA 70802 225.769.5500 | lada@lada.org | www.lada.org $75,465 Average Employee Earnings $325M State and Federal Income Taxes Paid Includes income taxes paid for direct, indirect and induced jobs. $1.2B PAYROLL (new car) (all dealerships) (created by dealerships) Includes 15,650 direct jobs and 18,424 indirect and induced jobs. 284 DEALERSHIPS $15.1B TOTAL SALES 34,074 TOTAL JOBS $25M INVENTORY TAX PAID (all dealerships) $18M CHARITABLE CONTRIBUTIONS (all dealerships) Annual Contribution of Louisiana's LOCAL New-Car Dealers Numbers reflect annual economic activity during 2023. Sources: Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Bureau of Labor Statistics, U.S. Census Bureau DEALERSHIP EMPLOYEES 4,328 69 TOTAL NEW-TRUCK DEALERSHIPS Annual Contribution of Louisiana's Class 4-8 LOCAL New-Truck Dealers $4.1B $300M 5,534 TOTAL SALES PAYROLL ANNUAL REGISTRATIONS (Class 4-8 new trucks) LOUISIANA AUTOMOBILE DEALERS ASSOCIATION 660 Laurel Street, Suite E, Baton Rouge, LA 70802 225.769.5500 | lada@lada.org | www.lada.org Numbers reflect annual economic activity during 2023. Sources: IHA Markit, NADA, Taxfoundation.org, U.S. Bureau of Labor Statistics DEALERSHIP EMPLOYEES TOTAL NEW-TRUCK DEALERSHIPS Annual Contribution of Louisiana's Class 4-8 New-Truck Dealers TOTAL SALES PAYROLL ANNUAL REGISTRATIONS (Class 4-8 new trucks) LOUISIANA AUTOMOBILE DEALERS ASSOCIATION 660 Laurel Street, Suite E, Baton Rouge, LA 70802 225.769.5500 | lada@lada.org | www.lada.org Numbers reflect annual economic activity during 2023. Sources: IHA Markit, NADA, Taxfoundation.org, U.S. Bureau of Labor Statistics 22
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