CATA News

[NADA] The Equal Employment Opportunity Commission (EEOC) recently released a new “Know Your Rights: Workplace Discrimination is Illegal” poster to replace one entitled “EEO is the Law.” Dealerships must prominently display the latest version of the “Know Your Rights” poster in conspicuous locations at their worksites. Such locations include poster boards accessible to applicants and employees with disabilities and employee websites.

The EEOC administers and enforces federal laws designed to protect workers against employment discrimination. The “Know Your Rights” poster is written to provide information on federal anti-discrimination law to applicants, employees, and employers. It stresses that federal law prohibits job discrimination based on race, color, sex (including pregnancy and related conditions, sexual orientation, or gender identity), national origin, religion, age (40 and older), equal pay, disability, or genetic information (including family medical history or genetic tests or services). It also notes that employers may not retaliate against an employee for filing a discrimination charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation, or proceeding.

General questions regarding the EEOC poster may be directed to regulatoryaffairs@nada.org.

From blacksmiths to bicycle-shop owners, many of America’s new car dealers have been in the transportation business for more than 100 years. NADA honors those dedicated dealers with the NADA Century Award.

Criteria

• The dealership must be a member of NADA.
• The dealership must have been in the retail transportation business for at least 100 continuous years.

Responsibilities & Restrictions

• The NADA Century Award is based on information the dealership provides on the application form.
• The dealer principal is responsible for accuracy of information provided.
• Each dealer is eligible to receive the NADA Century Award only once in its history.
• Applicants may be disqualified for providing any false information.

NADA Century Award recipients receive a letter from the current NADA Chairman. Recipients are recognized online and in the NADA Show Magazine. Complete the NADA Century Award application and submit to publicaffairs@nada.org. Include any dealership materials (digital images, videos, articles, bios, etc.) for NADA publicity purposes.

[Automotive News] Dealer associations in at least 13 states say Ford Motor Co. is unfairly burdening its retail network with costly requirements for electric vehicle sales and breaking some franchise laws.

Officials in Pennsylvania, Virginia, North Carolina and other states have written to Ford calling for significant change to one of CEO Jim Farley's signature initiatives, which would require dealers to invest up to $1.2 million on chargers, staff training and new sales standards to overhaul the retail experience.

Dealers can choose to spend $500,000 instead but would be allowed to sell no more than 25 EVs a year. Some of the state associations contend that such a cap is illegal.

The program "fails to make all vehicle models available to dealers on comparable terms and fails to allocate equitable quantities of EVs to Ford franchised dealers relative to their assigned market areas," members of the Southern Automotive Trade Association Executives, which represents 12 state dealer associations, said in a resolution.

The group called on Ford to "work with state association executives and franchised dealers to create a program that complies with the state laws, promotes competition and furthers the goal of EV adoption in all parts of the country."

John Devlin, CEO of the Pennsylvania Automotive Association, said in a letter to Farley that the certification program "violates multiple provisions of Pennsylvania law."

Ford told Automotive News it's confident the plan is legal and that "overall feedback has been positive."

"The Model e Electric Vehicle Program was designed to deliver an unparalleled purchase, service and ownership experience for customers," a Ford spokesperson said in an email. "Ford engaged with and listened to around 400 dealers in developing the program, which provides flexibility both in terms of enrollment level and timing.

"Dealers may also choose not to enroll in the voluntary Program and specialize in Ford’s industry-leading ICE portfolio of retail and commercial vehicles."

The automaker set an Oct. 31 deadline for dealers to select their investment level but postponed it to Dec. 2 after dealers asked for more time. Dealers can decide to not participate but would be limited to selling only gasoline and hybrid models starting in 2024.

Tim Hovik, chairman of Ford's National Dealer Council, said he understood the state associations' positions and suggested that the program still can be modified before taking effect. He noted that Ford held dozens of meetings with dealers whose stores vary in size to try to craft the best possible solution.

"Council is — 'supportive' might be too strong a word — but on board with where the company's going," Hovik told Automotive News. "The evolution of where we finished versus where we started was a direct result of dealer input. We've got a really good blueprint, but there are a couple flies in the ointment that we're going to have to work our way through. I feel there are pieces of what we rolled out that are very useful and can be effective, but I also think there are a lot of pieces that can have tweaks."

Franchise laws

Don Hall, CEO of the Virginia Automobile Dealers Association, lauded Ford's goals of making prices consistent and transparent, and of improving customers' buying experience.

But Hall, who signed the Southern states' resolution and sent a separate letter to Ford on behalf of Virginia dealers, said franchise laws don't allow an automaker to give less inventory to dealers who spend less on chargers and other equipment.

Virginia "passed laws years ago to make it abundantly clear that if you're a dealer, then you're entitled to your fair share of mix and quality as any other dealer is of your size," Hall said.

Robert Glaser, president of the North Carolina Automobile Dealers Association, which also signed the resolution and sent its own letter to Ford, said dealers who don't see a need to spend money on chargers shouldn't lose access to part of the brand's lineup.

"We believe if you're a Ford dealer, you're a Ford dealer," he told Automotive News. "You should be able to sell all the products Ford makes."

Hovik said the company and dealer council worked hard to create a fair system, which includes a second opt-in date in 2027 for any dealers who choose to sit out now.

Ford originally did not envision a lower investment tier to allow EV sales, even in a limited capacity, executives have said, but added the option after discussions with dealers. Hovik declined to say whether the sales cap for the $500,000 Model e Certified tier was Ford's idea. Those who join the higher tier would be called Model e Certified Elite.

"If a dealer spends two to three times to be an Elite-certified dealer, there has to be something in it," Hovik said. "Logically, they should get some type of reward in the business plan versus a dealer who will be part of it, but at the lower level of investment."

Hovik said he has spent many "sleepless nights" thinking about the allocation issue.

"Did we get it right? I don't know," he said. "Are we going to continue to work on it? Absolutely."

Charging plans

Most of a dealer's investment would go toward charger installations.

Those in the higher tier will be asked to invest $900,000 initially, largely to install two direct current fast chargers, one of which must be public facing. They likely will have to invest $300,000 more to add a third fast charger by 2026. The lower-tier investment would mainly go toward installing one public-facing fast charger.

Association officials say those costs are excessive and that smaller dealerships would not get a return on their investment for years.

"We appreciate that Ford wants to develop an EV charging network across the country; we just don't think it should be at our expense," Glaser said. "It should be market-driven rather than a mandate."

He said he's not sold on Ford's demands for dealerships to have public-facing chargers.

"You can charge your car in front of thousands of Walmarts, Targets," Glaser said. "In the long term, what consumer is going to charge their car at a Ford dealership if you could drive down the block and charge in front of a Starbucks?"

Pennsylvania's Devlin also is skeptical.

"I don't think I've talked to a dealer who thinks the public's going to come out in any significant numbers to dealerships to charge their cars," he said.

Profit margin concerns

Jason Cole, executive vice president of Cole Automotive Group, which includes a Ford store in Ashland, Ky., said the automaker should "go back to the drawing board" on the program. He's particularly concerned with the profit margin structure on future EVs.

Cole said Ford has indicated that he would lose 2 percentage points of guaranteed margin over the first two years of the program unless he meets certain requirements. He said Farley has stressed that margins will decline and that Ford dealers should sell customers subscription services to compensate.

"I think it's very important that every state association really goes to fight this," Cole said. "I think all the other manufacturers are looking at what happens here. If Ford gets by with this, I think every manufacturer will follow suit, and it could potentially be the end of the franchise dealer."

State association officials didn't rule out legal action if Ford won't address their concerns, though many were optimistic the two sides would reach a palatable agreement.

Hall, at last month's Automotive News Retail Forum in Chicago, said his association and likely others "are going to be very aggressive in '23," introducing legislation to strengthen state dealer franchise laws. He cited the Ford EV program as one example prompting the need for such action.

Marty Milstead, head of the Mississippi Automobile Dealers Association, has alerted the state's Motor Vehicle Commission, which enforces state franchise laws, about possible violations in Ford's program. The commission subsequently contacted Ford, which agreed to send representatives to Mississippi for a mid-November meeting on the matter.

After the commission issues a ruling, Milstead said, the dealer association will evaluate its options.

Ford and its dealers traditionally have had a strong relationship, and the company has been open to feedback in the past, such as when it paused a Lincoln-brand facility program before making changes based on dealer wishes.

North Carolina's Glaser said dealers in his state are open to flying to Michigan for a meeting with Ford executives, though he had not yet heard back from the company on the request.

"Our Ford dealers are very appreciative of the partnership they have with Ford," Glaser said. "They're not upset, they just want to change the program so it works."

Francis P. Hoffman, 86, passed away peacefully with family members at his side on Oct. 31, 2022. Hoffman was a CATA Director from 1995 to 2001 and owner of River Oaks Lincoln Mercury. Donations may be given in Francis’s name to Mercy Ships, www.mercyships.org. 

William “Bill” Walsh, Sr., 83, passed away on Wednesday, Oct. 26, 2022. Walsh was founder and president of the Bill Walsh Automotive Group from 1963 until his death. Representing seven automotive franchises, the Bill Walsh Automotive Group had locations in Ottawa, Peru and Streator, Ill. In lieu of flowers or gifts, memorials may be directed to The Child Welfare Guild, PO Box 456 Ottawa, 61350, Pet Project, PO Box 163, Ottawa, 61350.

William “Bill” Walsh, Sr., 83, passed away on Wednesday, Oct. 26, 2022. Walsh was founder and president of the Bill Walsh Automotive Group from 1963 until his death. Representing seven automotive franchises, the Bill Walsh Automotive Group had locations in Ottawa, Peru and Streator, Ill. In lieu of flowers or gifts, memorials may be directed to The Child Welfare Guild, PO Box 456 Ottawa, 61350, Pet Project, PO Box 163, Ottawa, 61350.

[From CATA Allied Member Utility Management Group] Natural gas prices have been receiving much attention lately as over the past 24 months we’ve seen two significant changes to the market. The first is an increase of pricing. As of late, depending on the month, prices are two to four times what they were two years ago. The second is the volatility of the market. The NGI Index, or the standardized price of natural gas for the Chicago market this year has ranged from $.4535 to $.879. It’s not uncommon for us to see the daily price of gas range from the low $.50’s to the low $.90’s within a 30 day period.

Locking rates for a percentage of your usage is a tool which can provide some budget certainty. When the market is stable which day you lock rates is not as important as the change in rates day to day is not significant. Selecting a day to lock rates with the volatility we’re experiencing becomes more difficult as rates can vary greatly from day to day. If you’d like to lock rates now or in the future we have two suggestions which address the current volatility.

The first is to utilize strike prices, where a target rate and percentage of use you’d like to lock is submitted to the supplier. The supplier watches the market daily and if your price is hit you have the option to either have the lock executed automatically or to be notified, giving you the choice to execute the lock or continue to watch the market. You have the option to be notified only if your price is hit, which is what most customers choose or to receive daily pricing.

The second suggestion is to start watching the market early. You may have fixed rates in place for the next year or so, but rates further out are much lower than near term rates making them more favorable and there’s no risk to submitting a strike price. Watching the market early gives you the opportunity to capitalize on a drop you may have otherwise missed. What we look for in suppliers is not only the option to offer a strike price, but the ability for their system to do it as an automated process as a manual process is difficult and time consuming for the supplier and drops in the market can be missed.

With the factors driving the market being unpredictable, no one can know what prices will do going forward or when this volatility will end, making these types of tools important in controlling your costs. If you have any questions regarding this or any energy related issue, please contact our office at 630-279-0117.

You may have received a call from the CATA asking you to sign a NADA PAC permission form. Signing this permission form is crucial to the success of the mission of NADA PAC. But do you even know what NADA PAC is?

NADA PAC, a federal political action committee sponsored by NADA, helps elect qualified individuals to Congress who understand the needs of new car and truck dealers. In the 2020 election cycle, NADA PAC was credited as being one of the nation's top three largest trade association political action committees in terms of both total fundraising and contributions to federal candidates. NADA PAC supports candidates for Congress based on the recommendations of CATA leadership.

To find out more about NADA PAC and its support of pro-dealer candidates, please call Dave Sloan at the CATA at 630-424-6055. If CATA doesn’t already have your NADA PAC permission on file, please find the form here and submit it to NADA.

Amie Lindaas, Director of Research & Insights at Chicago-based Cars.com, presented an interesting study at the recent Chicago Drives Electric event. The study took at deep dive into EV considerations among Cars.com shoppers, specifically citing the differences between male and female intenders. The study found that male shoppers were significantly more likely to be considering EVs. In addition, the study provides key insights into the mind of the EV shopper that dealers may find useful when selling EVs. Click here to download the study.

There is cause for concern regarding the prospects for the Chicago Area new vehicle market. Supply chain issues continue to limit inventories, inflation is surging, interest rates are moving higher, economic growth has turned negative, and consumer sentiment is weak. It’s a formidable list. But there are two key positives that will likely prevent deterioration in current sales rates and should provide a boost when supply issues abate and the economic picture brightens. Click here for the third quarter 2022 Chicago Auto Outlook.

The nomination of Ray Scarpelli, dealer principal at Ray Chevrolet and Ray Chrysler Dodge Jeep Ram in Fox Lake, Illinois, for the 2023 TIME Dealer of the Year award was announced today by TIME.

Scarpelli is one of a select group of 48 dealer nominees from across the country who will be honored at the 106th annual National Automobile Dealers Association (NADA) Show in Dallas, Texas, on January 27, 2023.

The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. The award recognizes the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Scarpelli was chosen to represent the Chicago Automobile Trade Association (CATA) in the national competition – one of only 48 auto dealers nominated for the 54th annual award from more than 16,000 nationwide.

“The lessons I have learned in the retail auto business and the people I have been lucky enough to know and work with have all contributed to the foundation of who I am today,” nominee Scarpelli said.

A 1984 graduate of Northwood University in Midland, Michigan, where he studied automotive marketing and management, Scarpelli has always been fascinated by cars. His father, Raymond Scarpelli Sr., owned a Chevrolet and Oldsmobile store, and Scarpelli relished his time there as a child.

“From an early age, my dad set an example that you should treat your customers the way you would want to be treated,” Scarpelli said. “Of course, it made all the sense in the world.”

Scarpelli later moved into the service department, was a lot attendant, washed cars and worked in the body shop. When it came time to look for a college, he let his passion for autos drive his decision. He chose Northwood University, where he could learn automotive marketing, management, accounting, service, parts and general operations – all the tools he would need to run a successful dealership. He also participated in hands-on activities, like the student-run outdoor Northwood University International Auto Show.

After college, Scarpelli worked in sales at his family’s Raymond Chevrolet Oldsmobile and continued his real-world education. He worked his way up through the ranks to become dealer principal of Ray Chevrolet and Ray Chrysler Dodge Jeep Ram in Fox Lake.

Over time, Scarpelli worked hard to grow the family business, adding key employees and improving customer satisfaction and service. He and his wife, Lisa, have two children who are now part of the dealership operation and the next generation to join the family business. He and his family also are active members of the Fox Lake community, and they reside in a town near the dealerships.

Scarpelli has held leadership positions for the CATA and served as chair of the Chicago Auto Show in 2019, overseeing the First Look for Charity black-tie gala. This popular fundraising event attracts car enthusiasts who also have a passion for philanthropy.

“In 2019, we raised $2.8 million for our charity partners, all of which are in the local area,” he said. “I was personally involved in selecting Catholic Charities of the Archdiocese of Chicago as a beneficiary.”

Other groups that benefitted from the successful event include Ann & Robert H. Lurie Children’s Hospital of Chicago, Boys & Girls Clubs of Chicago, Special Olympics Illinois and Turning Pointe Autism Foundation, among others.

Scarpelli is also proud of the partnerships he has created to support community nonprofit groups, organizations and schools. One of his favorites is the Big Play Program which rewards four local high schools by donating $25 for each “big play” achieved, including home runs, touchdowns, soccer goals and others.

“Over the years, we have donated more than $350,000 to support student athletes,” he said.

When the McHenry Outdoor Theater, a drive-in located in McHenry, Illinois, reopened following pandemic restrictions, Ray Chevrolet treated 350 families to tickets to a free movie. Scarpelli was also an early champion of the CATA’s USO Barbecue for the Troops fundraising initiative that, over the years, has collectively raised more than $1 million to support USO Illinois, local military and their families.

In addition, he hosts quarterly blood drives for Versiti Blood Center of Illinois; Toys for Tots toy drives; Christmas parties for children in-need; food drives to support Grant Township Food Pantry; and donates vehicles to driver’s education programs and to local police departments.

“Our greatest strength is our relationship with the community,” he said. “And our friends, customers and neighbors are an extension of our family.”

Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive $5,000 for their favorite charities and the winner will receive $10,000 to give to charity, donated by Ally.

In its 12th year as exclusive sponsor, Ally also will recognize dealer nominees and their community efforts by contributing $1,000 to each nominee’s 501(c)3 charity of choice. Nominees will be recognized on AllyDealerHeroes.com, which highlights the philanthropic contributions and achievements of TIME Dealer of the Year nominees.

“For over 50 years, TIME has been committed to recognizing the impact of automotive dealers on their communities with the TIME Dealer of the Year award," said Edward Felsenthal, editor in chief and CEO, TIME. "We are proud to continue the legacy of honoring these works of service with our partners at Ally.”

Doug Timmerman, president of dealer financial services, Ally, said, “Auto dealers across the country who are nominated for this award each year are committed to not only doing it right and leading in a rapidly changing automotive industry but to strengthening their communities through giving back. The TIME Dealer of the Year program celebrates dealers who are the role models of the retail auto industry for their continuous efforts to lift up and support their employees, customers and communities.”

Scarpelli was nominated for the TIME Dealer of the Year award by the CATA Board of Directors. For more information, visit TIME Dealer of the Year.