CATA News

The U.S. Department of Labor recently published a final rule clarifying the rights of employees to authorize a representative to accompany an Occupational Safety and Health Administration (“OSHA”) compliance officer during an inspection of their workplace. This new rule is effective on May 31, 2024.

The Occupational Safety and Health Act (“Act”) grants employees the right to have a representative present during OSHA inspections. One of the Act’s implementing regulations provides that a representative authorized by employees “shall be an employee of the employer.” However, the regulation also creates an exception for third-party representatives when “in the judgment of the Compliance Safety and Health Officer, good cause has been shown” why the third party is “reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace.” The regulation points to two non-exhaustive examples – an industrial hygienist and a safety engineer. Further, an OSHA Standard Interpretation Letter concludes that an employee could authorize a person affiliated with a union or community organization to act as a third-party representative as such representatives make “a positive contribution to a thorough and effective inspection.”

A recent court decision challenged this interpretation in allowing union representatives, finding that OSHA’s existing regulation only permitted “employees of the employer” to be an authorized representative. Hence, the new rule was necessary to clarify the perceived conflict between the Act and its interpretation found in OSHA’s Interpretation Letter.

The new rule makes two changes.

Employer’s Action Items

With the new rule in place, employers should take several steps to protect their rights during an inspection.

If employers have any questions or concerns, we recommend they contact SESCO to ensure compliance.  For assistance, contact the CATA’s contact at SESCO, Jamie Hasty at 423-764-4127 or by email at sesco@sescomgt.com.

[From CATA Approved Partner UMG] In 2021, Illinois passed legislation mandating that eventually 100 percent of the electricity generated in the state be generated by clean energy sources. As part of that legislation, the state negotiated a deal with Exelon to keep existing nuclear plants open. At a time where the electric market is low customers will be billed an additional rate per kWh, which will go to Exelon to subsidize the plants. Conversely when the market is high Exelon owes customers credit. Starting in June 2022, customers received a significant credit on their ComEd invoices, with that credit dropping over the next 12 months. Those calculations reset every June 1, and, as of June 2023, customers were billed an additional rate per kWh, with those charges being significant. That charge, called the Carbon Free Resource Adjustment, is listed on your ComEd invoice under the section titled Taxes and Other. Unfortunately, it can’t be negotiated and applies to all customers regardless of what electric supplier they choose.

While businesses can’t negotiate that increase, they can take advantage of other options resulting from the state’s promotion of clean energy. The first are the significant rebates offered to customers who upgrade their lighting to LED’s. The ROI’s have been attractive and reducing your usage by performing those upgrades is a good way to help offset the additional charges you’re being billed. If you haven’t upgraded your lighting yet and would like to schedule an audit, please contact the UMG office at 630-279-0117. Audits are done at no charge and with no obligation.

The second is by taking advantage of community solar credits for accounts in the 0-100kw class. Under this program you’re not required to install solar equipment on your building. It does not require you to change electric providers, has no impact on your supplier agreement and there’s no change to your service. The state is subsidizing the building of solar farms to replace coal and natural gas plants. You’ll receive a credit on your ComEd invoice for that subsidy and will then be billed by the solar provider you contract with for a percentage of that subsidy. Instead of the state paying the solar providers directly, for customers who take part in this program, the subsidy flows through them and then to the solar provider with the customer keeping a percentage of the funds. Enrollment in this program is dependent on availability; if the program fills up, your account will be put on a waitlist.

If you’d like more information regarding these programs or the natural gas and electric programs UMG offers to CATA members, please contact 630-279-0117.

Charities and civic organizations know that Chicagoland new-car dealers are an integral part of their communities and are often deeply involved in charitable causes. However, dealers rarely receive the recognition they deserve for their efforts. The Chicago Automobile Trade Association created Chicagoland Dealers Care in 2008 to raise awareness of dealers' local charitable efforts and, in many cases, assist with the programs.

When it comes to donations, the Chicagoland Dealers Care program, the CATA will match your local, charitable contribution up to $1,500 to maximize the impact dealers make in your community. Grant requests can be made every three years for a variety of causes: academic programs, cultural arts, performing arts, medical research, and even humanitarian needs, to name just a few.

Since its inception in 2008, the grassroots Chicagoland Dealers Care program has donated more than $128,000 to local charitable organizations. Additionally, since 1992, the association has raised more than $60 million for Chicago-area charities during the annual First Look for Charity black-tie event, traditionally held the evening before the Chicago Auto Show opens to the public. Learn more about the Chicagoland Dealers Care program and how you can get involved. To submit a match request, download this form and email it to Hayley Feichter (hfeichter@drivechicago.com).

The Federal Trade Commission’s new Government and Business Impersonation rule went into effect April 1, 2024. While it was already an illegal trade practice and violation of federal and state law to manipulate consumers by impersonating the government or another business, the new rule expedites and enhances penalties for doing so.

Dealers should be cautioned to avoid any implication that marketing materials are being issued by any entity other than the dealership. For example, dealers can notify customers that their vehicle is on the National Highway Traffic Safety Administration’s (NHTSA) recall list, but it’s another to imply that a marketing piece is being sent via NHTSA (and not the dealership).

Dealers should also be vigilant in reporting any deceptive marketing efforts, especially those trying to sell service contracts by pretending to be your dealership.

Read more from the FTC here.

This past week, thieves attempted to steal vehicles at a Bettenhausen FIAT in Tinley. Just after midnight, a white Chrysler 300 was seen pulling up to the dealership on surveillance cameras. Two individuals got out of the vehicles and were captured taking pictures of VINs and pulling door handles. The operator monitoring the surveillance cameras immediately called local police.

One individual was carrying a firearm and attempted to break into a Dodge Durango. As officers arrived on site, the suspects fled the scene immediately.

As a reminder, all keys and vehicles should be kept locked at all times.

The dealership employed Midpoint Technology Group for video monitoring at the dealership.

CATA Members are encouraged to enjoy a day on the course with fellow CATA dealers and allied members. From amateur to pro, this is a fun day for golfers of all levels! Not a golfer? Lunch-only tickets are available for purchase so you can still enjoy the beautiful day and networking before the shotgun begins.

The day will begin with a networking reception followed by a hot lunch buffet. During lunch, the 2024-2025 CATA President & Chairperson will address all members and give an annual meeting update. The shotgun start on all courses will begin promptly after lunch.

The golf outing will take place across 3 courses: Course 1, Course 3 and the Ravines Course (a premier, more challenging course). Note: there is an additional fee for those who wish to golf on the Ravines course.

Schedule of Events

Each course will have contests throughout the day for the chance to win cash prizes! Contests include:

All golfers will have the chance to win prizes in the golf outing raffle. Prizes, donated by participating members, will be raffled off during the 19th Hole Happy Hour. All golfers will receive tickets to enter the raffle with their registration and additional tickets can be purchased at the outing.

Your golf registration will include the networking reception, access to the driving range, lunch, golf fees on selected course, drinks throughout each course, and Happy Hour drinks and hors d'oeuvres. Club rental is available at Cog Hill for an additional charge. Lunch-only tickets are available for those not interested in golfing. Lunch-only tickets do not include raffle tickets and are valid 10 a.m. - 12 p.m.

Registration is open through May 24. Registration prices will increase after May 8.

[From NADA] Electric-vehicle shoppers are getting sick of Tesla. Well over half of the EV shoppers surveyed by UBS in an annual study said they would prefer to buy an electric car from a legacy carmaker over a new manufacturer such as Tesla. On top of that, the bank found that the likelihood a US shopper would buy an EV increased with brands other than Tesla.

These results and other signs of stagnation overall in the EV market give UBS reason to believe that Tesla's near- to midterm growth plans are in danger. UBS has a lower-than-average delivery forecast for Elon Musk's automaker, predicting sales of 1.8 million this year and about 2 million in 2025. That's compared with the current consensus among analysts of deliveries just below 2 million this year and about 2.4 million in 2025.

Despite EV shoppers' clear desire for more options, Tesla remains the top brand for consideration and saw an increase in preference among American shoppers, the survey said. Joseph Spak, a UBS analyst, attributed this growth to recent floundering EV efforts from legacy brands in the US, given that BYD managed to surpass Tesla in preference among Chinese respondents.

Several CATA dealers have called with questions regarding the IRS’ registration portal for Clean Vehicle Credits. There are about 13,000 dealers registered so only a low overall number of dealers remain unregistered. According to Gregory D. Cote, Director & Counsel at the NADA, the remaining issues are attributable to dealer error, tax compliance, or some other cause, failure to provide banking information, or, in rare cases, a technical glitch.

There are some additional fixes being made by the IRS that could resolve some of the outstanding technical problems soon, but dealers with tax compliance issues are not able to register. Others who did not respond to banking information requests, or did not register properly, will probably need to re-register.

For dealers having a problem registering, it is recommended that dealers call the tax compliance line to confirm there are no outstanding tax issues. The tax line is 833-933-7680. For dealers that continue to have problem, the NADA is offering assistance in troubleshooting the problem. Simply contact Greg Cote at gcote@nada.org.

Is your organization prepared to meet the challenges of the reinvigorated union movement? Are your supervisors prepared to educate your employees about the reasons you prefer to remain union-free? Do they know the tell-tale signs to identify potential union organizing activity before organizing efforts go public?

New rules for organizing workplaces and a very union-friendly administration have emboldened unions to increase organizing efforts across the state and within the automotive industry. This presentation will provide attendees with:

The goal of this session is for employers to leave with an understanding of labor law compliance and union awareness/organizing efforts and the tools to help them create a workplace where third-party representation is not necessary and where employees feel heard and respected.

Please click HERE to register for SESCO’s 2024 Webinars

[From CATA Approved Partner Dynatron] Every dealership has multiple profitability buckets: Sales, F&I, service, parts, etc. There are many levers to pull inside the dealership to maximize profit, but what about the profitability buckets outside the dealership? For instance, profit participation.

Maximizing profit participation programs requires more than a set-it-and-forget-it mentality. Regardless of the program your dealership participates in, managing it is instrumental to boosting profitability. Here are some strategies to help ensure your profits don’t erode over time:

First, make sure you sell products that can be reinsured. Depending on the program you’re in or the F&I provider you work with, some back-end profit programs allow you to reinsure more products than others. Surprisingly, GAP is a product many dealers shy away from reinsuring due to market condition volatility. An excellent portfolio manager/provider anticipates market trends, manages and measures claims and retention, and brings executable solutions to the table to maximize the portfolio's profitability. Remember, don’t “set it and forget it!” Inflation has caused parts pricing to skyrocket, and with labor rates accelerating, have you looked at premium pricing adjustments, or have you accepted the erosion of your favorable tax benefits portfolio?

It is also important to limit chargebacks and cancellations. Training your finance department to sell service contracts to match loan terms and length of anticipated ownership is key to long-term profitability. The exposure to chargeback is so much less than defaulting to selling terms of seven years or longer. Focusing on the customer needs, and not what F&I perceives is easier to sell, is better for everyone.

Accelerated premium products are another great value to the company. They help sell more vehicles with a Why Buy Here differentiator and give customers a reason to shop local. It won’t be long before the Why Buy Here mantra becomes table stakes in the industry, as this not only provides customer value but also drives sales volume and generates a high, ceded premium to your profit participation portfolio. Some products are even non-chargeable.

The only constant in the auto industry is change. Automotive dealers are some of the most resilient and adaptable economic leaders, due to the evolving and ever-changing climate of the auto industry. Your profit participation program should get the same attention as other areas of your business to ensure that it is operating at its fullest potential.