CATA News

[From CATA Legislative Consultant] The Illinois General Assembly will reconvene for the Fall Veto Session on November 12-14 and November 19-21. This is the first time in recent memory that the Legislature will hold veto session over two consecutive weeks. Traditionally, in election years, veto session is conducted the week before Thanksgiving week and the week after Thanksgiving – thus giving members a week off during the two-week session.

The Governor signed the following bills into law.

Overlooked but lucrative, high-mileage vehicles represent a key customer segment deserving attention. Through comprehensive analysis of over 27 million Repair Orders (ROs), we unveil the significant upsell opportunities associated with cars over 60K miles. By understanding the correlation between vehicle age and RO costs, our findings underscore the importance of addressing one-line ROs, which could leave substantial revenue on the table.

Download the Data!

Our solution? Maximizing service drive talent and implementing a mileage-aware routing process, ensuring skilled technicians and advisors handle vehicles based on their specific needs.

Unlock the full revenue potential of your service department with Dynatron Software’s tailored reporting insights and expert service advisor training. Are you ready to tap into Fixed Ops profitability? Get in the know with Dynatron.

In this issue:

• Effective Leaders Understand, Appreciate and Maximize Their Strengths and Minimize Their Weaknesses
• Transitioning to the Management Team
• Mental Health in the Workplace

Download the May/June SESCO Report

[From NADA] The House Appropriations Committee passed the FY25 Financial Services and General Government (FSGG) appropriations bill, which included an NADA-backed provision (Sec. 530) that would stop the Federal Trade Commission (FTC) from implementing or enforcing the Vehicle Shopping Rule (or “CARS” Rule) until Sept. 30, 2025. 

NADA also successfully advocated against a last-minute poison pill amendment offered by Rep. Matt Cartwright (D-Penn.). Under this amendment, the FTC chair could waive cutting off funding for FTC policy riders by merely providing a justification to the Appropriations Committee. While the sponsor insisted the amendment was not intended to impact the Vehicle Shopping Rule, given the FTC’s lack of reasoned rulemaking and track record of evading requirements, NADA strongly opposed the amendment since it would effectively allow the FTC Chair to use nearly any pretext to render Sec. 530 meaningless. This amendment failed by a vote of 24-33.

The Vehicle Shopping Rule is simply terrible for consumers. It will add massive amounts of time, complexity, paperwork and cost to car buying and shopping for tens of millions of Americans every year.

A recently updated Center for Automotive Research (CAR) study, based on the final rule, found that the Vehicle Shopping Rule will increase costs by $24.1 billion over 10 years, which consumers and small business dealers will have to absorb. Overall, the mandates of the rule would add 60-80 minutes to the car buying process and cost consumers $1.3 billion per year in lost time.

The FY25 House FSGG bill is expected to be considered on the House floor late next month.

CATA Dealer Members are provided free Employee Relations and HR support through SESCO. If you have any questions, contact SESCO at 1-800-764-4127; sesco@sescomgt.com or via your Consultant of Record, Ms. Jamie M. Hasty, Vice President, jamie@sescomgt.com or 804-931-6281.

The association flourished under Sloan’s leadership, and he will be greatly missed. To show their appreciation for Sloan’s contributions, the CATA Board of Directors decided to create a scholarship in Sloan’s name: the David E. Sloan Legacy Scholarship for the College of Communication Arts and Sciences at Michigan State University, Sloan’s alma mater.

David Sloan isn’t just a name associated with the Chicago Automobile Trade Association (CATA) or Chicago Auto Show; he is synonymous with dedication, leadership, innovation, integrity, and faith. Sloan was the driving force behind the prestigious CATA and devoted an incredible 31 years to the Chicagoland new-car dealers and to the Chicago Auto Show. Under Sloan’s leadership, the Chicago Auto Show has evolved to be one of the premier auto shows in the world.

Perhaps what sets Sloan apart is not just his professional accomplishments, but the legacy of mentorship he leaves behind. He always encouraged his team to strive to perform their best, all with the intent of bettering and progressing the CATA and the Chicago Auto Show. Raised in the state of Michigan and a proud graduate from Michigan State University, Sloan is a Spartan at heart and would love nothing more than to pass the legacy on to a deserving student in MSU’s College of Communication Arts & Sciences.

The Scholarship is intended to encourage students who have demonstrated the capacity to achieve educational and professional goals, the motivation to achieve these goals and the initiative to seek opportunities to further their progress. It will be funded by the CATA for the next five years, and Sloan will have the opportunity to present the scholarship to the student during the kickoff breakfast to the Chicago Auto Show each year.

While most of Illinois’ new laws take effect at the beginning of the calendar year, other pieces of legislation hit the books at the year’s midpoint, and such is the case on July 1. In fact, at least nine laws will at least partially go into effect at the start of the new month, and several could have impacts on area new-car dealerships.

• HB 3882 - Driver's Licenses for Undocumented Immigrants. Beginning July 1, undocumented immigrants living in the state of Illinois will be permitted to obtain driver’s licenses in a move that officials argue will help decrease stigmas and increase safety on area roadways. According to the text of the bill, individuals seeking a license must pass a driving test, have valid car insurance, be able to present identification documents for purposes of obtaining the license, and must be able to prove at least one year of residency within the state of Illinois.
• HB 1122 – The Freelance Worker Protection Act. Enhanced protections in Illinois for freelance workers will also go into effect on July 1. Primarily, the bill obligates companies to pay freelance workers on or before the date their contractually agreed payments are due. If contracts do not specify a date for payment, then compensation is due no later than 30 days after the completion of work, according to the text of the bill. The bill also enhances protections for freelance workers against threats, intimidation, discipline, harassment and discrimination, and codifies ways of reporting violations of the act to the Illinois Department of Labor.

Other Changes Coming July 1

Beginning July 1, Chicago's hourly minimum wage will go from $15.80 to $16.20 per hour for companies with 21 or more employees. For those with 20 or fewer employees, minimum wage will rise to $16.20.

Chicago workers will also be eligible for two types of paid leave beginning on July 1, with all employees who work at least 80 hours within a 120-day period eligible for up to five days of paid leave and five days of paid sick leave.

The CATA has received word that the Local 701 is actively attempting to recruit new union shops at local new-car dealerships. Through its partnership with SESCO, the CATA offers  some Do’s and Don’ts to dealers involved in unionization activities.

Many dealers nationwide have experienced significant disruptions in business and outages due to a cyber attack on CDK Global’s dealer management system. At this point, it is too early to say what exactly happened over the last 48 hours, but it is being termed a significant cyber attack. The company voluntarily shut down its core systems in a cautionary move and attempted to restore most of them yesterday afternoon. As of this morning many dealer systems were still not operational.

It is not yet clear as to the extent of the intrusion or what data may have been compromised so the scope and a requirement to respond is not yet clear.  At this time, CATA Allied Member Assured Partners is advising all impacted dealers to report the breach to their cyber liability carrier to ensure timely reporting and response to the breach.

There are several coverages in the cyber liability insurance form that may provide protection for dealers impacted by the breach. One being Dependent Business Income loss triggered by a dependent system failure. It is a Privacy Breach, Security Breach or Administrative Error that triggers this coverage, and it appears that CDK Global is an Outsourced Service Provider who has experienced a Security Breach. In most cases the time element waiting period to for a dependent business interruption claim has expired triggering potential loss and restitution of loss income due to the outage to the dealers effected. 

As the scope of the breach unfolds and it is determined what if any customer data has been compromised, Privacy laws may require notification to any affected parties. Most cyber liability forms provide coverage for notification. Current review of the CDK contract to determine whether CDK or the dealerships will be responsible for complying with notification in accordance with state and federal privacy laws.

Assured Partners also anticipates that this event will be a recordable incident under the FTC Safeguards Rule. The CATA and Assured Partners will have additional guidance on this as the scope of the claim unfolds in the coming days. If you have any questions, you can contact Chris Schrementi at Assured Partners.

As we communicated via email last week, the Illinois Governor and Democratic leaders recently approved a bill that would cap the current retail sales tax allowance dealers—and all Illinois retailers—receive at $1K per month or $12K annually. Currently, Illinois dealers receive 1.75% of the sales taxes as a reimbursement for collecting, administering and distributing the money to taxing bodies. CATA estimates this will result in a $60K loss in annual revenue for Illinois dealers, on average.

We’re committed to fighting on dealers’ behalf and are working diligently to try and help dealers recoup some (ideally all) of what would be lost, but we NEED YOUR HELP.

CATA introduced a new lobbying resource called Congress Plus a couple of weeks ago. It’s critical we have as many of our dealer members as possible join this platform. Key benefits include reaching local legislators in a concise and timely manner when issues like these arise. Dealers will be able to customize email templates and quickly press “send” to reach their local legislators. There is power in numbers, and the dealers deserve to be heard.

We urge you to take the time to sign on to Congress Plus; this will greatly help with grassroots lobbying efforts moving forward.

Sign up HERE for Congress Plus. (It takes only a few minutes!)