E–NEWSLETTER ISSUE #5 – 2019 A Message From The President s fall and the final quarter of the year approach, new and used car sales have picked up at dealerships on a local and national level. We hope this trend continues for the rest of the year, and the post Labor Day momentum continues strong! TheA association has some really wonderful events planned for October and November (see following pages for details). Being an active paid current member provides discounts and/or complimentary admission to some of these upcoming events so be sure not to miss out! We will continue the push with our elected officials at the city, county, state and federal levels to support or defend against legislation that impacts all new car dealers! We need full membership participation to have the “voice of the dealers” be heard loud and clear. We hope the summer months allowed for some relaxing moments, and we will look to see you at one of these events, or the Los Angeles Auto Show in November. David Ellis GLANCDA President Calif. lawmakers send dealer franchise bill to governor’s desk By Lindsay Vanhulle After a similar bill was vetoed in 2018, California lawmakers have again passed dealer franchise legislation that would in part adjust the reim- bursement rate the retailers receive from auto- makers for warranty and recall service work. With the legislation, backed by the California New Car Dealers Association, going to the gov- ernor’s desk for the second time in two years, auto dealers say they hope their effort won’t end in a veto this time. The California State Assembly last week adopt- ed the state Senate’s changes to AB 179, a final procedural step before the bill moves to Gov. Gavin Newsom’s desk. Newsom’s office did not immediately respond to a request seeking com- performance standards before California’s New ment on whether the governor, who took office Motor Vehicle Board. in January, intends to sign it. Brian Maas, president of the California New Car Newsom, a Democrat, has until Oct. 13 to sign Dealers Association, said the warranty portion the bill before the California Legislature recess- of the bill is modeled after changes other states es until January. have made. The legislation deals with, among other things, Reimbursements can vary based on the dealer the rate that automakers reimburse franchised and the automaker, but Maas said California fran- dealerships for parts and labor on warranty and chised dealers in general could be receiving 40 recall repairs. percent less from automakers on warranty jobs Currently, state law sets warranty reimburse- vs. what retail customers would pay. ments generally on what’s considered rea- “That puts incredible financial pressure on a deal- sonable. The bill, if enacted, would set the re- er, and arguably is a disincentive for technicians imbursement that manufacturers must pay to want to do warranty work,” Maas told Automo- dealerships for parts and labor on warranty and tive News. “Dealers should get for warranty work recall work at “rates equal to the franchisee’s what they get for retail work. And the purpose of retail labor rate and retail parts rate,” according the formula is to make it fair to both the manufac- to the bill. Dealers would calculate those rates turer and the dealer as to how that rate is set.” based on a formula spelled out in the legislation, The Alliance of Automobile Manufacturers and using data from past retail repair jobs. the Association of Global Automakers, trade It’s similar in language to a bill that passed last groups that represent automakers, opposed the year, but was vetoed by then-Gov. Jerry Brown. bill. Maas said changes to the warranty reim- A new bill was introduced in January by Assem- bursement language were made in this year’s bill blywoman Eloise Reyes, D-San Bernardino, after negotiations between new-car dealers and who also introduced the bill last year. automakers. The bill also addresses other dealer fran- The Alliance says that although talks led to an chise-related issues, including preventing auto- improved bill from last year, it remains opposed. makers from requiring dealers to upgrade their facilities within 10 years of the last improvement, and allowing dealers to challenge automakers’ (Continued on next page) E-Newsletter Issue 5 - 2019 • GLANCDA 2 (Continued from page 2) Service Technician Among the reasons, it wrote in a June letter to Reyes, the bill’s sponsor, is that “the bill changes Apprentice Job Fair at this proven method of reimbursement by allow- ing dealers to self-select warranty claims to be Cerritos College used as the cost basis of all future warranty com- pensation. In addition, the proposed prohibition October 1 on cost recovery surcharges would ensure that individual dealers cannot be held accountable ur friends at Cerritos College have for their independent pricing decisions, resulting just started two cohorts of General in reduced competition and higher prices for all Motors and Chrysler technician stu- consumers.” dents who are ready to start a career at a dealership. We are planning a Brown, a Democrat who was term-limited out of Omeet and greet at Cerritos College Campus at office, called the proposed reimbursement for- 5:30 p.m. on Tuesday, October 1st with instructors mula in the bill he vetoed a year ago “complex,” and Under current law, manufacturers are required students. to reimburse dealers for warranty and recall re- pairs at a ‘reasonable’ rate negotiated between If you are familiar with the Cerritos College pro- the two parties,” Brown wrote in his veto letter. gram, we look forward to seeing your service man- “This framework appears to be working reason- ager there. If you not familiar, the program is a two ably well and I see no reason to adopt the rath- year apprentice type of program that is coordinat- er complicated formula authorized in this bill — ed with both GM and Chrysler factory backing. with perhaps unintended consequences.” Maas said this year’s legislation changed the Students enroll in the factory program of their formula as it relates to how a dealer’s time was choice and attend class on campus for nine weeks calculated on a repair job. and he cautioned and wok at a dealership for nine weeks, alternat- about potential unintended effects. r ing for two years at which time the students will earn an Associate’s degree and be very familiar with the job needed to be a productive employee at your dealership. The first nine week class for both Chrysler and GM dealers will be finished Oc- tober 18th and we are encouraging you to send your service manager to Cerritos College to share a slice of pizza, get to know the students and take one in as a potential apprentice. Details are as follows: Date: October 1, 2019 Time: 5:30 pm - 7:30 pm Location: Cerritos College Automotive Build- ing RSVP: by Friday Sept 13 to Bob Smith ([email protected]) and Natalie Sinclair (Natalie@caladmanagement. com) minimum of 10 dealers needed, and maxi- mum of 15. 3 GLANCDA • E-Newsletter Issue 5 - 2019 2019 BOARD MEMBERS PRESIDENT David Ellis Glendale Dodge Chrysler Jeep VICE PRESIDENT Howard Tenenbaum Keyes Automotive Group Seminar Series: Workplace SECRETARY-TREASURER Jeanne Brewer Violence Response and Anti-Harass- Glendale Acura ment Manager Trainings IMMEDIATE PAST PRESIDENT Peter Smith Glendale – October 30th Bob Smith Toyota $49 with discount code: 50OFFOCTLA DIRECTOR Bert Boeckmann CNCDA is looking forward to partnering with HR Hotlink on a Galpin Motors timely seminar series focused on workplace violence response DIRECTOR training and anti-harassment training. Coming to a location Cheri Fleming near you in October, you won’t want to miss this valuable semi- Valencia Acura nar, presented by John Boggs of Fine, Boggs & Perkins LLP. DIRECTOR Peter Hoffman Workplace Violence Response Training (1 Hour) Sierra Automotive Group CNCDA has received numerous inquiries from dealer mem- bers on how to avoid and deal with workplace violence. After DIRECTOR recent tragic events in California, we think it is imperative to Greg Bozzani provide this extremely useful training to further understand how Bozzani Motors to diffuse workplace conflicts and prevent them from turning DIRECTOR violent. Darryl Holter Felix Chevrolet Required Anti-Harassment Manager Training (2 Hours) The second portion of the seminar will be devoted to meeting DIRECTOR Tim Smith new compliance requirements regarding sexual harassment Bob Smith BMW/Mini training. Employers with 5 or more employees are required to provide this training to supervisors. This training is critical in DIRECTOR preventing situations of sexual harassment from arising, and in John Symes ensuring your managers know how to handle them effectively if Symes Automotive Group they do. DIRECTOR Ian Thomas Register Now! Thomas Acura LEGAL COUNSEL Use discount code 50OFFOCTLA for $50 off the Joe Berberich normal $99 price. EXECUTIVE DIRECTOR Bob Smith 4 GLANCDA • E-Newsletter Issue 5 - 2019 GLANCDA Loses Friend, Mike A. Hernandez ike Hernandez, 83, of Whittier, capacity to CA passed on Sunday, August help those less 11, 2019, after a 7 year battle with fortunate, it then Cancer. Born May 14, 1936 in becomes your Aurora, Illinois. He was one of 11 responsibility to Mchildren born to Francisco Acosta & Maria Acosta do so. He was a Hernandez. He grew up in San Luis Portosi, well respected but Los Angeles, California became home. He leader in began his automotive career at Downtown Ford the Hispanic in 1959. In 1961, Mr. Hernandez moved to Cort community. Fox Ford to be the Used Car Manager until 1964 Families, when he left to work at Hollywood Dodge where employees, he was appointed General Sales Manager.