The ground beneath me still quakes from the aftershocks of the 2016 presidential election. Donald J. Trump delivered the most improbable of election victories in United States history as he completely shocked pundits, media and other experts.
Now the business of governing begins. What does that mean for Americans? What does that mean for car dealers?
Fortunately for businesses, Trump will be working with a Republican majority in both the House and the Senate. He should have a decent chance to advance some of his agenda.
He is likely to seek vast cuts in regulations that have hampered the small businesses across our country. This bodes well for car dealers.
NADA's agenda should find a more favorable environment across the regulatory agencies in DC. That should mean less government in our dealerships.
Hopefully, Trump can focus on those issues that will find some consensus in Congress. There are many issues that both sides agree need attention. Mr. Trump, stay with those....and relinquish your Twitter account!
Virtually every dealer, manager or salesperson I know has been put in the position of having to
explain to a customer that one vehicle, with the same MSRP as the identical vehicle sitting next to it, costs $4,000-5,000 more than the other one. Or they have sold vehicles at a significant loss at the beginning of the month in an effort to hit an objective that will allow them to perhaps(!) break even on vehicles they sell at the end of the month.
Manufacturers do not understand the disruption, confusion and malaise they cause with such ridiculous incentive(?) programs. They do permanent damage to their brand, customer-dealer relations and dealer-manufacturer relations.
The NADA Board of Directors had an extended discussion about this topic at our most recent meeting. The frustration, anger and distrust came quickly to the surface as we talked. There was a wide variety of ideas to deal with it but there was not any consensus. Of course, our anti-trust attorney kept the discussion on track and us out of trouble!
The topic is on the agenda for the next board meeting but I'm not confident that NADA is in a great position to really do anything significant (other than have the discussion with the manufacturers) about this issue.
Like most states, South Dakota has a law on the books that specifically deals with this topic (my emphasis added):
After several years of threatening an antelope hunt, and a couple years of applying for tags, Alex and I finally got tags for a 2016 South Dakota antelope hunt. We had applied for Butte County tags because the number of tags was great and we could stay in our cabin.
Since neither of us had ever hunted antelope before, the research began shortly after notification that we had gotten tags. Butte County had two antelope units and I found that there was plenty of public land and walk in access for us to hunt in the unit for which we had tags.
We couldn't hunt the opening weekend because I planned to attend the 2016 Ryder Cup in the Twin Cities. So we made plans for the second weekend of the season. We drove out to the hills on Thursday evening after work and got in late Thursday night.
On Friday morning, we took off early for southern Butte County. We were a 45-minute drive from our destination. Armed with GPS and Google maps on the iPad, we were set. Our entire weekend hunt would be in the shadow of Bear Butte.
Bear Butte could be seen throughout our hunt.
We found some Bureau of Land Management (BLM) land that looked good to us and parked the truck. We loaded up our gear and walked about 2 1/2 miles and sat on hills looking out over the flat area adjacent to the Belle Fourche river. We would sit for a half an hour and then move on to another hill.We saw nothing. So about 10 AM we headed back to the truck to find a new area to hunt.
Our South Dakota delegation (Chairman Dutch VanSanten, NADAPAC Chairman Bruce Eide, NextGen delegate Bryan Boocock, and Myron) just returned from the NADA Washington Conference. I got a bit different view of the event this year as Legislative Affairs Chairman.
We are very fortunate to have two Senators (Thune and Rounds) and a Congresswoman (Noem) who understand and support small business issues. I can assure you that this is not universal. As I visit with directors from others states, they are increasingly frustrated with their representation and how Washington works (or doesn't work!).
At last year's conference, we focused on urging support for H.R. 1737, which nullifies the CFPB’s flawed auto finance guidance, requires the agency to study the true impact on consumers before issuing new guidance, places provisions for a public comment period and requires the CFPB to consult with the agencies that currently share jurisdiction over the indirect auto finance market.
After the Washington Conference last fall, the bill passed by a veto-proof majority vote of 332-96; including 88 Democrats! Once again, dealers got it done.
This year, we had over 300 dealers and ATAEs take to the Hill to advocate for S.B. 2663, the companion bill for H.R. 1737 on the Senate side. We urged support for and action on the bill.
Like H.R. 1737, the bill was written on a bipartisan basis and it deserves bipartisan support. But whether a Democrat or Republican, both have recognized a simple truth: Every consumer deserves access to competitive financing and great rates when they buy a new car or truck.
NADA hopes to get it passed in a "lame duck" session after the election. There are a lot of groups betting against the dealers. We'll see what happens!
I believe the next fight coming between the automobile industry and federal regulators is on the fuel economy front. The battle will be over whether to relax the Obama administration’s future mileage targets. While the direct combatants may be the feds and the OEMs, the dealers (and our customers) will be in the crossfire.
Last November, the New York Times suggested the reason there aren't more electric cars on the road is because that car dealers won't sell electric cars. We have not hit Obama's goal of 1 million electric cars on the road because of the nation's car dealers.
I'm guessing that you're like me in that you just want to sell whatever your customers want to buy. If there was an overwhelming demand for electric vehicles, dealers across the country would be stocking more of them and selling more of them. But there isn't and we're not! We know that the competitive forces among OEMs compel them to do the same thing - build the vehicles customers want to buy.
My real concern in this upcoming fight is the plight of the light duty truck - specifically the pickups our South Dakota customers drive on a daily basis. They need a full size truck to do their work. It is work station, an implement, an office and perhaps, even their family vehicle.
While I hope I'm wrong, I don't believe we will see a full-size pickup that will get 50 miles per gallon anytime soon. If we do, I just hope that the OEMs that I represent can offer one!
In the mean time, we do not want the federal regulators to handicap ag producers, working people, outdoorsmen and other truck buyers by downsizing and depowering their pickups.
I grew up in a Husker house. Anyone who did knows what I mean by that. My Dad, "Husker Harry" as he was known to his friends, was born and raised in Howells, NE and found his way to Lincoln in the 1954 where he earned degrees in business administration and "Husker Fever". It was a virulent strain of the fever with which attempted to afflict everyone around him!
Harry, Alex and me at Notre Dame vs. Nebraska game in 2001
I think I first realized the consequences of this Husker affliction when I was a young boy and went pheasant hunting with him. South Dakota pheasant hunting is a whole different tradition (which I have discussed before) but my Dad liked to mix them - Husker football and SD ringnecks.
Dad would walk through the corn fields in pursuit of the "wiley ringneck" with headphones on so he could listen to the Husker football game. Now, I'm talking about the early version of radio headphones that were the size of shoe boxes on each side and weighed about 10 pounds. He never hit many pheasants with those on but he never MISSED a Husker touchdown. We'd be walking through the field and, all of a sudden, he would start whooping it up, celebrating the latest Husker venture into the end-zone.
I was ten years old in 1970 when the Huskers made a big trip to the west coast to play the USC Trojans. Dad and Mom invited some friends to our house to listen to the game on the radio. The game started at like 9 pm Central Time and Dad told me I could sit up with them and listen to it. We sat around the kitchen table as the reception faded in and out (needless to say, out at the most inopportune moments!) into the wee hours of the next morning. It was a classic and ended in a 21-21 tie.
Later that season, Dad and Mom took me to the Nebraska-Oklahoma game in Lincoln. We were guests of then Husker head coach, Bob Devaney. We stayed where the Huskers players stayed the night before the game and I remember what a thrill is was to see those guys walking through the lobby. I still have the sweatshirt (though it is closer to pink now than it is "scarlet"!), game program and ticket stubs from that weekend. The Huskers won a hard-fought battle over the Sooners that day, 28-21. But the outcome wasn't decided until the final play, when Husker defensive back Jim Anderson picked off Jack Mildren's heave aimed for Jon Harrison in the end zone.
Nebraska finished 10-0-1, its first undefeated regular season since 1965, and ranked No. 3 in both wire service polls, behind two unbeaten and untied teams: No. 1 Texas and No. 2 Ohio State. The UPI didn’t conduct a poll after bowl games, so Texas was its national champion for 1970.
Notre Dame upset Texas 24-11, and Stanford staged a fourth-quarter comeback to defeat Ohio State 27-17. Nebraska learned of the latter result during the Orange Bowl’s pregame warmups.
The Huskers took care of business with a fourth quarter rally over the LSU Tigers in the Orange Bowl that night and captured their first national title. My Dad smiled for a month about that.
Then, after running the table on the first 10 games, Nebraska’s 1971 season came down to a single game at Owen Field in Norman, OK on Thanksgiving Day. The #1 Cornhuskers played #2 Oklahoma in what still is regularly regarded as college football’s "Game of the Century".
Both teams entered the game undefeated and untied. Nebraska had the nation’s top-ranked defense. Oklahoma had its most productive offense.
The cover of Sports Illustrated (Nov. 22, 1971) published the week of the game included photographs of Nebraska linebacker Bob Terrio and Oklahoma running back Greg Pruitt, nose-to-nose, beneath the headline: "Irresistible Oklahoma Meets Immovable Nebraska.’’
My family was in Omaha for Thanksgiving that year where we celebrated with my Dad's family. We all gathered at my Uncle Ron (Dad's younger brother) and Aunt Diane's house for Thanksgiving meal and then the football feast. I was impressed with the fact that they had a "Go Big Red" toilet in their basement complete with Husker toilet paper! There must have been 25-30 Knusts packed in to that basement for the game. I took a front row seat with my cousins.
The game was one great play after another. The highlights can be seen below and the entire game can be seen here. (The old ads are worth a look!) Nebraska won 35-31 as Jeff Kinney scored the winning touchdown on a 2-yard plunge, the 12th play of the championship drive, with 1:38 remaining.
The two teams went on to crush the state of Alabama in their bowl games. Nebraska won its second consecutive national championship by beating Alabama, 38-6, in the Orange Bowl. The Sooners crushed Auburn, 42-22, in the Sugar Bowl.
Those fifteen months, starting with the Huskers tie with USC on September 19, 1970 and culminating with that win over Oklahoma on Thanksgiving Day, 1971 pretty much cemented my life -long affinity for Nebraska football.
Like everything else he did, my Dad rooted for the Huskers with passion and enthusiasm. The quickest way to have him befriend you was to pledge loyalty to the Cornhuskers. I have said many times that if we didn't watch the Huskers on Saturday, we didn't get to eat dinner. If they lost, it wasn't served!!
Harry's last Husker Game with daughter Sarah
Over the years, Dad and I made many pilgrimages to Memorial Stadium together. Often we would introduce someone new to the pageantry of Nebraska football. Our last trip together came in October of 2010 to see the Huskers beat Missouri 31-17. He made Husker fans out of my wife, Judy, and all three of our kids.
Husker football is certainly one of "Husker Harry's"legacies. I'm happy to have his Husker genes!
It was the bottom of the 17th inning, scored tied at 31-31, bases loaded and two men out. Suddenly, in deep left center field, a light began flashing. It was completely dark in the backyard field except for the light mounted on the house behind home plate. The flashing light in the outfield was a distraction to the hitter who was digging in for the critical at bat. At first no one noticed, but eventually, that light (in combination with my mother's calls) drew everyone's attention.
I don't remember how that game turned out. I don't even remember if I got to play until "the end" - perhaps because it is scrambled with so many other memories of summer evening neighborhood wiffle ball games, which were a nightly ritual in my neighborhood growing up.
I was reminded of such summer activities as I recently read Harper Lee's classic "To Kill a Mockingbird". While there are many complex and serious themes in that book, the tales of summer antics and playing outdoors until dark reminded me of my favorite childhood games.
Though my neighborhood had a vacant lot suitable for ball games, it was not mowed sufficiently most of the time and it did not have any (yard) lights (for those late night, extra inning classic that occurred at least six nights each week!). So we played most of our games at "Hutmacher Field", which was the largest backyard in the neighborhood.
Shaped a little like old Polo Grounds in New York (very short distances to the left and right field walls, and an unusually deep center field), it was a classic ball park. Just like every classic old ball park, it had its own characteristics.
Polo Grounds
There was a five foot drop off a retaining wall behind first base (which led to more slides into first), a cottonwood tree belt line created the boundary behind third base (sometimes a high fly to right field didn't come down!) and "the wall" in center field was a drainage ditch (leaving us to trust the outfielder's call as it got dark!). Visiting players were consistently flummoxed by the grounds rules!
Of course when I look at "Hutmacher Field" now, it's not nearly as big as I remember it when I was 10 years old. The entire area between second base and the center field "wall" is now occupied by a blue spruce tree that no 10 year-old could ever appreciate then but that every South Dakota adult marvels at now! In its day, though, "Hutmacher Field" was a very spacious ball park. Like Polo Grounds, it served double duty as a football field in the fall.
Our neighborhood was full of ball players - both boys and girls. Some were regulars, other played only when there was nothing else to do. But the core of both teams remained pretty consistent.
Just like Major League Baseball teams, we played virtually every night. Our games, however, rarely went just nine innings. Often we would play a doubleheader and sometimes, as more players joined, we would play tripleheaders! I am certain that we played as many games in June-August as those big leaguers played in April-September.
There were no umpires. Get in the box and swing the bat. Swing and miss three times and go sit down. Breaks evened themselves out over the course of the summer. There were no adults to interfere or hand out participation trophies. We learned how to work it out and get along or the game would disintegrate.
Evenings in late June and early July were particularly busy as the summer solstice offered us daylight until almost 10 pm. Games lasting 25-30 innings were common then. BONUS BASEBALL! I still think of the wiffle ball season starting to wind down when I hear the dry, undulating buzz of the cicadas in late July and August.
It seemed like my Mom broke up every game. Though I know this wasn't true, her beckoning from the back door of our house in left center field was pretty hard to ignore - though I did my best!. I had determined that I could get in at least 2 innings from the first call to the "there's gonna be hell to pay" final summoning.
As I look back fondly at these summer games, I realize how lucky we were back then that there was no X-Box, Facebook or Snapchat. We had sweat, grass stains and mosquitoes instead! How lucky we were!
In late June, I attended the seventh annual year executive forum sponsored by NADA and the American Financial Services Association (AFSA) where we discussed legislative, regulatory and operational challenges facing auto dealers and finance sources.
As he reviewed the bureau’s activities in the area of vehicle financing, he insisted on calling our retail discounting of interest rates a "dealer markup" and suggested several times that some type of "flat rate" compensation to dealers was a preferred model. While it was not a surprise to hear this, it was frustrating to see and hear how narrow-minded he still was on this issue.
A survey of those in attendance revealed that top concerns for finance sources include exams and enforcement actions, cybersecurity, compliance, changes in vehicle values and hiring, training and retaining employees.
Dealers are most concerned with new regulations from the FTC and CFPB, existing regulations and compliance, and hiring, training and retaining employees. New opportunities focused on technology improvements and mobile financing options for lenders, and leasing and e-contracting for dealers.
House Again Rebukes CFPB Over Its Flawed Auto Finance Guidance
By a bipartisan vote of 260-162, the House of Representatives passed an amendment offered by Rep. Frank Guinta (R-N.H.) that would nullify the Consumer Financial Protection Bureau's (CFPB) flawed auto finance guidance by preventing the CFPB from spending any funds to enforce the guidance. The amendment was added to the fiscal year 2017 Financial Services appropriations bill (H.R. 5485) on the House floor. This House action is another rebuke of the CFPB's auto finance guidance, which threatens a consumer's ability to receive a discounted auto loan from a dealer. This is the first time Congress has used the appropriations process to rein in the CFPB. Nineteen Democrats and 241 Republicans voted for the amendment.
Last November, the House passed Rep. Guinta's bill, H.R. 1737, by a bipartisan vote of 332-96. This bill would nullify the CFPB's 2013 auto finance guidance and establish a transparent process with public participation to determine future auto finance guidance. In contrast, the CFPB issued the flawed 2013 guidance without any public comment or transparency, and the agency admitted it has failed to study the impact of its guidance on consumers.
Economic Analysis Reaffirms That State Franchise Laws Lower Prices, Benefit Consumers
The analysis, “State Automobile Franchise Laws: Public or Private Interests?” found that state franchise laws serve to foster intense competition among franchised new-car dealers, which “demonstrably lowers prices for consumers” and “alter[s] the way consumers buy cars and service in a positive way.”
“Franchise laws do not limit competition or lead to higher prices,” said study co-author and Phoenix Center Senior Fellow Professor T. Randolph Beard. “In fact, all the evidence suggests that there is intense competition leading to very low margins on new car sales.”
The Phoenix Center study came in response to recent scrutiny of state franchise laws by the Federal Trade Commission (FTC) and others, and the suggestion that these laws are outdated. The study concluded, however, that state franchise laws are indeed still very beneficial to consumers.
“When selling an automobile-service bundle, our analysis indicates that franchised auto dealers have a better incentive with respect to consumer desires than car manufacturers,” said study co-author and Phoenix Center Chief Economist Dr. George S. Ford. “As such, it is not unreasonable for state legislatures to choose a market design that best serves their constituents in the form of local auto franchise laws.”
Do Americans know how lucky they really are? They have Uncle Sam to protect them from themselves.
The Federal Trade Commission has proposed a survey of consumers regarding their experiences trading in, buying and financing vehicles at dealerships. The commission will conduct 40 interviews with consumers that are 90 minutes in length.
In 2015, there were over 38 million used vehicle transactions and over 17 million new vehicle transactions in our country. The FTC will conduct 40 interviews and will then have a complete understanding of the automotive market in America!
This survey is a repeat of the one the FTC conducted five years ago. That survey found no systemic problems with the auto-retailing sector. Processes have certainly gone to hell since that survey!
I know I can be a bit cynical but perhaps we should survey health care patients, attorney clients, insurance company customers, mobile phone customers, etc. Is there no room for improvement in any of these transactions? Some would suggest that market forces and competition would be very good at improving and streamlining the processes.
At some point, perhaps consumers must be responsible for their own choices. There are many options in the marketplace. Consumers have control over where they buy. That can (and should) be the ultimate regulator! A Peek Behind the CFPB Curtain
This "must see" video (http://goo.gl/Mcu0qe) takes a somewhat humorous look at the shenanigans going on with the CFPB in their attempt to regulate and punish those involved in auto finance lending. This is your government at work!
Supreme Court Issues Pro-Dealer Opinion in Service Writer Overtime Case
The Supreme Court issued an opinion in Encino Motorcars v. Navarro, vacating a 2015 Ninth Circuit Court of Appeals decision that had held that dealership “service writers” are not covered by the federal “salesmen” exemption from overtime pay. In doing so, the Supreme Court expressly rejected a 2011 U.S. Department of Labor (DOL) interpretative regulation that service writers/advisors are not "salesmen" exempt from overtime. In particular, the Court faulted DOL for failing to give adequate weight to dealerships’ reliance interests during the rulemaking process, and for failing to provide a “reasoned explanation” for the abrupt change of policy. The Supreme Court’s decision requires the Ninth Circuit to reconsider its prior decision consistent with the language of the Fair Labor Standards Act (FLSA) without giving “controlling weight” to the DOL’s 2011 regulation.
In March 2015, the federal Ninth Circuit Court of Appeals ruled that service writers are not exempt from overtime as “salesmen.” That decision was based on the Ninth Circuit’s conclusion that preamble language found in a 2011 DOL rulemaking constituted an interpretation of the FLSA entitled to legal deference. Together with the state dealer associations covered by the Ninth Circuit, NADA filed an amicus brief in support of a certiorari petition with the U.S. Supreme Court. The Supreme Court granted “cert” in January and heard oral argument in April. Former Solicitor-General Paul Clement expertly (and successfully) argued on behalf of the petitioner with NADA’s amicus brief being cited several times during the argument and in the Opinion itself.
Overtime FAQ for Dealers
As I mentioned in this space last month, the U.S. Department of Labor (DOL) issued a rule that dramatically increases the salary and compensation levels that must be met in order for "white collar" dealership employees to be exempt from overtime. NADA has issued a new FAQ publication on the white collar rule's impacts on dealerships and their employees.
OSHA Issues New Injury and Illness Electronic Reporting Mandate
Starting in 2017, certain dealerships must begin submitting employee workplace injury and illness records to the Occupational Safety and Health Administration (OSHA). All dealerships must maintain reasonable procedures by which employees can report work related injuries and illnesses promptly and accurately. The new reporting rule builds on existing mandates requiring dealerships with 10 or more employees to accurately record and post employee workplace injury and illness using OSHA Forms. In the future, these forms must be made available to OSHA and state labor inspectors upon request. Car dealerships with fewer than 250 employees at a single "establishment" are not required to submitforms to OSHA.
Though I've had tags in the past, I had never killed a spring turkey. My first, and only, turkeys were harvested in the fall of 2014. Spring turkey hunting comes at a very busy time for me.
This year, I drew a prairie turkey tag for Brule County and an archery turkey tag. The plan was to kill a turkey with the shotgun with the first opportunity and bust out the bow if another opportunity presented itself.
Again, this spring was extremely busy. My opportunity to shoot a turkey was dwindling rather quickly. I had seen a few hens and a few jakes in the yard but other than one tom a week before the season opened - nothing.
On this morning, I came charging out the back door of the house to check on the mower before heading off to the store. It was about 8:45. I got two steps out the door and saw a jake and a tom close to the path on the ridge behind the house. They were just on the edge of the yard.
They heard me but didn't see me and I was able to get back before the door slammed. I went to the garage to get my gun and call. I worked the box call a couple times inside the house and the tom immediately swelled up like a balloon being inflated. He began strutting around and looking for that elusive hen he had heard. Little did he know that "she" was in the screen porch!
I went back through the house, out the garage door in the front of the house and around the north side of the house. I peeked around the back of the pizza oven in the back yard to see Mr. Tom still in strut mode, his his wattle was radiating Husker red and snood dangling from his light blue head, wiggling as if full of red Jello. I poked my gun around the corner of the fence and took aim.
Scene of the slaughter is edge of lawn directly behind
The blast of my 10 gauge shotgun released a turkey load at about 35-40 yards. He jumped up and turned toward the draw following his companion, the jake. Did I get him?
As I walked toward where he went, I saw that I had drawn feathers from him. I walked about 20 yards past where I shot him to find a heap of turkey laying in the grass. He was 15-16 pounds. He had nice long spurs and a 8-9 inch beard. My first spring turkey!
I lugged him back to the house before fetching a camo vest to wear over my work clothes for a photo! I had him cleaned, in the fridge and was to the store by 9:30! Not s bad start to a beautiful spring morning!
