WANADA Bulletin # 38-06 September 21, 2006 CAMPAIGN 2006 DC & MD Primaries Result in Mixed Bag for Dealers WANADA Optimistic it Can Build on Support for Tier One Auto Show

fter the confetti settled, the “It’s a new day in DC,” said Williams has been an outspoken A champagne was consumed WANADA’s government rela- advocate of taking The Wash- and the last speech made, how tions consultant for DC, Doug- ington Auto Show to an interna- did the dealer community fare las Patton of Oldaker, Biden & tional “tier one” status, and he in last week’s District and Belair, LLP. But Patton was has served as honorary chair- primaries? Like most quick to point out that, man of the auto show and its elections, there were some hits, “WANADA supported both Congressional Gala and Charity some misses and some close Fenty and Gray, and we’re opti- Preview. calls for pro-business candi- mistic that dealers will enjoy Fenty told The Washington dates, all of which should serve the same support we have had Post he would seek the support as a wake-up call for dealers to under Mayor Anthony Wil- of the business community in pay close attention during the liams. In fact, we hope to build furthering his goals for the city. run-up for all the marbles in on that support.” “I would be foolish not to want November. As dealers are aware, Mayor (Continued on page 2)

In DC, where it was no se- cret most in the business com- KINDRED KORNER munity favored Linda Cropp, it was Adrian Fenty who emerged Allen Jones, Hamilton and Hamilton as, can we say, “mayor elect,” WANADA’s Counsel & Member of the since he is not expected to be Association’s Leadership seriously challenged in Novem- ber. Sure to follow Cropp as “I feel like a team member in one of the most Council Chairman was council vital industries and exciting businesses in the member Vincent Gray, who will world,” says Allen Jones of his longstanding tenure as legal counsel to WANADA. Before Jones, there preside over a council with five was his former partner at Wilkes-Artis, Lou Mann, new freshman members after who was counsel to the association for 25 plus November. years. “Representing Washington area dealers has been an important part of my legal career and one which my partners and I have continuously and se- Inside… riously engaged for many years ,” said Jones. VA MVDB Report.…………….p.3 “Allen’s longevity here has been grounded in Allen Jones. Loan & Lease Terms Get specialized and reliable counsel,” said WANADA President Gerard Mur- Longer……..…………….....p.3 phy, who has worked with Jones throughout his years as WANADA’s New Rule to Require Stability CEO. “When you need him he’s there, and you can put what he tells you Control on All Vehicles….p.4 in the bank,” said Murphy. “It’s no accident, for example, that Former NHTSA Chief Calls for WANADA has never been sued,” said Murphy a lawyer himself. New Side Impact Rules ...p.4 Jones’ firm, Hamilton and Hamilton, LLP, was founded in 1876, mak- Bush Nominates Mary Peters to head DOT……………...…..p.4 (Continued on page 2) Page 2 WANADA Bulletin #38-06 September 21, 2006 CAMPAIGN 2006 DC & MD Primaries tained their seats. Area dealers have good relations with both. (Continued from page 1) economic development solu- The race for Maryland Gov- to know what business leader- tions that will ensure that eco- ernor will pit Baltimore Mayor ship is thinking,” he said. nomic vibrancy for our future.” Martin O’Malley (D) against In Prince Georges County, Gov. Bob Ehrlich (R). In the In Maryland, WANADA extremely tight races for County government relations consultant race for US Senate to replace Executive and US Congress , individual deal- Alan Rifkin of Rifkin, also signaled voter unrest and a Livingston, Levitan & Silver, ers are supporting both principal move toward a possible chang- contenders to varying degrees. offered the following comment: ing of the guard. At this writing, “In many respects, the Septem- Rep (D) and Lt. however, County Executive Gov. (R). ber primary was historic. Long- Jack B. Johnson and Rep. Al- time fixtures in Maryland poli- Stay tuned and involved…it bert R. Wynn (leading but still should be interesting. tics, like Comptroller William undecided) appear to have re- Donald Schaefer, State Senator Ida Ruben and others fell short of reelection. The primary also KINDRED KORNER saw a strong shift toward politi- Allen Jones, Hamilton and Hamilton cal strength in the Washington Metropolitan Area that has (Continued from page 1) every appearance of continu- ing it one of the best established law firms in Washington. In 1998, Ham- ing.” ilton and Hamilton merged with the well established Washington firm Reasoner & Fox, and continues to provide the full gamut of legal services This was reflected in both to the many prominent area businesses and individuals. The firm's main Montgomery County and Prince office is in Washington with offices in Rockville, Maryland and Alexan- Georges County, where voters dria, Virginia. (Go to www.hamiltonlaw.com for more information.) spurned many experienced, pro- A lifelong Washingtonian, Jones is a graduate of Michigan State Uni- business candidates and incum- versity, where he played football, and Georgetown University Law Center bents in favor of “slow growth” where he wrote for the law review. His experience includes a distin- advocates and fresh faces. This guished resume in real estate law, corporate law and government regula- was clearly the case in the sur- tions. prising landslide victory of Isiah He is also an accomplished trial lawyer having represented dealers as (Ike) Leggett, who defeated co-lead counsel in the controversial Maryland “Doc Fees” case in the Steve Silverman and will re- 1990s which saved dealers tens of millions of dollars when the court ruled in the dealers’ favor against the state. place pro-business Douglas “It was alleged that dealers had improperly charged vehicle sale docu- Duncan as Montgomery County mentary fees and the state of Maryland had given us notice that these Executive. Nor was the equally same dealers were obligated to forfeit up to four years of fees derived surprising defeat of veteran from finance contracts,” Jones explains. “We won that case by establish- council member Michael Subin ing that these doc fees were not finance charges, but part of the cash price good news for the business of the vehicle as reflected in the sales contract,” he said. “It was a big win community. for dealers most assuredly, but also for the proposition that the govern- Nonetheless, Montgomery ment can’t run roughshod over an industry. I count the case as one of my County Chamber of Commerce most important and memorable,” said Jones. Interim President and CEO Recognized by his peers, Jones was a founder and early leader of the Georgette Godwin observed Council for Court Excellence, a past president of the Bar Association of that, “the need to keep our the District of Columbia and a past president of the Barristers of Washing- ton. economy vibrant and competi- Allen Jones can be contacted at Hamilton & Hamilton, LLC, 1900 M tive is our number one priority St., N.W., Suite 410, Washington, DC 20036; tel: (202) 463-8282; e-mail: and we will continue to pursue [email protected]. transportation, education and WANADA Bulletin #38-06 September 21, 2006 Page 3 VA MVDB REPORT VA Dealer Board Announces New Criminal History Process At its September 11, 2006 was similar to click pricing by are also impermissible bird dog meeting in Richmond, the Vir- internet search companies like fees. Unlicensed individuals or ginia Motor Vehicle Dealer Google. companies who are paid the Board (MVDB) announced that One aspect of this program improper fees are not subject to a new criminal history process involves potential phone calls action by the Motor Vehicle will be used for applicants. Pre- from consumers. A consumer Dealer Board. Only licensed viously, the state police were interested in a listed vehicle can dealers who improperly pay responsible for running criminal call the newspaper which will bird dog fees are subject to history reports on applicants. then direct the call to the dealer- regulatory action by MVDB. However, this limited the crimi- ship. MVDB members debated Fees -- MVDB noted that it nal history reports to Virginia whether this constituted has been in business for more convictions. “referrals” for which the news- than ten years. Given current A new private service will be paper will be paid. fee amounts, MVDB projects used that will enable MVDB to Because the information con- that in as little as two years, do a nationwide check of con- cerning the consumer’s identity fees it is currently receiving victions. In addition, the new will not be transferred automati- may not be sufficient to sup- service will be responsible for cally, but must be volunteered port the activities of MVDB. an OFAC check on applicants. by the customer if the customer Consequently, MVDB author- In other notable actions: agrees, this was not viewed as a ized the executive director to Revocation of License -- referral relationship. The news- commence a proceeding to MVDB considered the revoca- papers “click-pricing” was ap- consider increasing certain fees tion of the sales license of a for- proved. paid by license holders and for mer manager of a franchised Dealers are reminded, how- dealer license plates. The pre- dealership who, according to ever, of Virginia law concern- cise increases will be depend- the facts found at a hearing, had ing “bird dog fees”. It is illegal ent upon a proceeding pursuant been responsible for false re- to pay a person who is not li- to the Virginia Administrative ports of vehicle sales to the censed as a salesperson with the Procedure Act that will take manufacturer. These reports led dealership for the sale of a vehi- approximately 18 months. to audit chargebacks by the cle. Given the broad language The next meeting of the manufacturer in excess of $1.5 of the Virginia statute, it has Virginia Motor Vehicle Dealer million. Because of the serious been the position of MVDB for Board and its committees will fraudulent acts by this em- some time that payments to a be held Monday, November ployee, MVDB voted to revoke person who is not licensed to 13, 2006 at DMV headquarters the sales license of the em- the dealership based on referrals in Richmond. ployee involved. Referrals -- There were sub- stantial conversations among Loan and Lease Terms Get Longer MVDB members about a pro- posed newspaper advertising Vehicle loan and lease terms continue to lengthen, according to program that the newspaper the Consumer Bankers Association's 2006 Automobile Finance claimed was “like Google”. Study. Auto lenders favor using low monthly payments to boost Basically, the newspaper wants business, and loan maturities of longer than 60 months represented to print the inventories of deal- 55 percent of new vehicle loans written last year, according to the ers in a special section, and study. The average new vehicle loan increased 4 percent to dealers will pay based upon $23,534 last year over 2004, while the average used vehicle loan contacts by consumers. The rose 3 percent to $16,419 last year, reports Automotive News. newspaper contended that this Page 4 WANADA Bulletin #38-06 September 21, 2006 SAFETY UPDATE New Rule to Require Stability Control on All Vehicles by 2012

The National Highway Traffic Safety Administration (NHTSA), at the direction of Congress, last week issued a new proposed rule mandating all new cars and trucks must be equipped with electronic stability control (ESC) by the 2012 model year. Amazingly – at least for a federal regulation – the new rule was hailed by automakers, suppliers, politicians of all stripes, and consumer and safety advocates. The Insurance Institute for Highway Safety said ESC systems, which use brakes and engine power to keep a car from veering out of the driver's control, could save 10,000 lives each year, making it the most life-saving safety device since the seat belt. About 34,000 people are killed in auto crashes in the United States each year. ESC is currently standard on 40 percent of 2006 passenger vehicle models and is offered as an option on another 15 percent. As a stand-alone option, ESC costs $300 to $800, according to the Institute. On some vehicles, however, it is only available as part of a more expensive option package. NHTSA typically lets automakers decide on the technology they use to meet the agency's rules. But studies have been so convincing about stability control's ability to dramatically reduce crashes that Con- gress ordered NHTSA to require it, according to USA Today.

Former NHTSA Chief Calls for New Side Impact Rules

Former NHTSA Chief Jeffrey Runge is calling on the federal government to complete unfinished proposals to improve vehicle safety. Runge left NHTSA in July 2005 to become chief medical officer at the U.S. Department of Homeland Security. In an interview with The Detroit News, Runge urged NHTSA to complete a long-delayed rule to improve vehicle roof strength, and to finalize side impact standards that could save 1,000 lives annually. Automakers have agreed to voluntarily install side air bags in all vehicles by Sept. 1, 2009. But NHTSA is considering a proposal that would require automakers to significantly upgrade their side pro- tection systems. NHTSA issued its proposed side-impact rule in May, 2004, but they are not expected to issue a final rule until next year. NHTSA spokesman Rae Tyson said the side-impact rulemaking is very complex. "It's a work in pro- gress. It certainly represents the last major crash-worthiness regulation that's in the works," Tyson said.

Mary Peters Nominated for Transportation Secretary President Bush nominated Mary Peters, a former federal highway administrator, to be the new Secre- tary of Transportation—only the second woman ever to hold the post. If confirmed by the Senate, Peters would replace Norman Mineta, who resigned in July after holding the job longer than anyone else -- five-and-a-half years.

Thought for the Week…

When we (took over the presidency), the thing that surprised me the most was that things were as bad as we'd been saying they were.

—John F. Kennedy