Don Hewlett - The newsLINK Group

Dealers’ Choice
FALL 2011
Volume 51, Issue 3
O F F I C I A L P U B L I C AT I O N O F T H E T E X A S A U T O M O B I L E
Don Hewlett
Georgetown
D E A L E R S A S S O C I AT I O N
Meet the Newest Face of
APPI Energy
To expand on our 10 year partnership with TADA and our success in reducing
electricity cost for 250 dealers, APPI Energy has a new office near
Arlington, TX, staffed by Dawn Diaz, Senior Energy Consultant.
With over a decade of experience in
electricity consulting in Texas, Dawn will
work with TADA Dealers to provide the
education, information, and solutions
required for you to effectively compete
in the Texas electricity market.
• Electricity Procurement
• Lighting Retrofits
Dawn Diaz, Senior Energy Consultant
• Facility Audits
• Energy Curtailment
Programs
Contact Dawn at 817-914-1710 or [email protected].
990 Highway 287 N. • Suite 106, PMB 317 • Mansfield, TX 76063
www.appienergy.com
Dealers’ Choice
O F F I C I A L P U B L I C AT I O N O F T H E T E X A S A U T O M O B I L E
18
D E A L E R S A S S O C I AT I O N
The Dealers’ Choice is a publication of Newsletters Ink and is the official publication of Texas
Automobile Dealers Association. The Dealers’
Choice is published 4 times per year by Media
Communications Group, Inc. The statements and
opinions expressed herein are those of the individual
authors and do not necessarily represent the views
of Dealers’ Choice, or its publisher Media Communications Group, Inc. Any legal advice should be
regarded as general information. It is strongly recommended that one contact an attorney for counsel
regarding specific circumstances. Likewise, the
appearance of advertisers does not constitute an
endorsement of the products or services featured
by Media Communications Group, Inc.
25
Donna Norton, Managing Editor
21
6 Adverse Action Legislation: What Procedures Should You Have in Place to Comply?
About the cover: Don and Patty Hewlett,
Georgetown, Texas.
9 Counselor’s Corner: Texas Occupations Code (“TOC”)
12 TADA and AUTOPAC Together Make it Happen
15 Texas Legislature Takes Action on Dealer Priorities
18 A Tribute to Ramsay Gillman: 1944 - 2011
21 Don Hewlett: A Passion for Cars
25
Texas Dealer Academy – “Leadership Development for Today and Tomorrow”
26
Gillman Auto Group Partners with NBC’s Today Show “Lend a Hand Charity”
29 DeMarcus Ware: How I Spent My Lockout
Scan this code with
your smart phone for
a direct link to the
TADA website.
30 It’s a Whole Lot Cooler in Hood County, Texas Thanks to One Granbury Car Dealership
32 Why Can’t I Get My Car Serviced at the Dealership?
33 Is Your Cash Stuck in “Park”? Shift to “Drive” with the Right Inventory!
4
Adverse Action
Legislation:
What Procedures Should You Have in
Place to Comply?
a counteroffer, or determine that the
application is incomplete. Your policy
should require that you give this notice
within 30 days of receiving any credit
application.
š Adopt adverse action notice procedures
to ensure that you send adverse action
notices when required. You should have
a policy of sending notices whenever
you are involved in making the credit
decision or setting the terms of credit
and adverse action is taken. If you send
out simplified adverse action notices,
designate a finance manager who is
knowledgeable about adverse action law
and trained in your dealership’s adverse
action notice procedures to respond
to all customer requests for a specific
statement of reasons.
› Adopt and implement record-retention
policies. In particular, ensure you keep
records stating, or otherwise record, the
specific reason why you did not provide
financing on the requested terms. Your
record retention policy should also
include procedures for disposing of
records as required by other applicable
laws and regulations that are not discussed in this guide.
F
ederal law prohibits discrimination
in any aspect of a credit transaction.
Under the Equal Credit Opportunity
Act (“ECOA”), you cannot treat a credit
applicant less favorably because of color,
religion, national origin, sex, marital
status, age, or because the applicant relies
on social security, welfare, or other public
assistance. This law also requires you to
give a notice, called an “adverse action notice,” under certain circumstances, such as
denying a request for credit. A related law,
the Fair Credit Reporting Act (“FCRA”),
also may require you to give an adverse
action notice (which may be combined
with the ECOA notice) if a credit report or
information from a third party other than
a consumer reporting agency (“CRA”) is
involved in an adverse credit decision.
You should adopt policies and procedures to ensure that you are: (i) sending
out timely and proper notices as required
by the ECOA and the FCRA, and (ii)
maintaining proper records. You should
implement a policy that, at a minimum,
includes the following:
™ A requirement to notify customers who
apply for credit about the action you
take—whether you accept, reject, make
visit us at
œ Adopt a formal practice of allocating
responsibility for sending out adverse
action notices. For example, consider
including a statement in the dealer/
finance source agreements that the finance source is responsible for sending
out its own adverse action notices.
 Conduct periodic, internal audits to
ensure compliance with the policies and
procedures you adopt. Q
This article is adapted from A Dealer Guide to
Adverse Action Notices. Please sign in to www.
nadauniversity.com and visit Resource Toolbox
to access this and other Driven guides.
www.tada.org
6
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COUNSELOR’S CORNER
Texas Occupations
Code (“TOC”)
What Should Dealers Know About This Statute?
BY WM. DAVID COFFEY, III, WM. DAVID COFFEY III & ASSOCIATES, AUSTIN, TX
This article is the opinion of the author and is not endorsed by TADA.
A dealer may wish to seek their own legal counsel.
of litigation. Our offices, over the last 25
years, have had our share.
What, then, should dealers
know about the statute?
Perhaps the most import issue that
a franchised dealer will ever face is
an at tempt by the manufact urer or
distributor to terminate the dealer’s
franchise agreement. The statute, at
TOC §§ 2301.453/.455, at tempts to
limit the contractual grounds for termination contained in most franchise
agreements and attempts to impose a
notice and hearing str ucture on the
manufacturer/distributor’s attempt to
terminate the agreement.
Typical grounds for termination that
this office has seen over the years are
alleged fraud in the warranty claims
process, a l leged sa les per for mance
deficiencies, alleged facility inadequacies and alleged customer satisfaction
deficiencies. One could write a book on
each one of these grounds for termination before even proceeding to the rest
of the statutory subsections contained
in Chapter 2301. In this article, we only
have time to scratch the surface of one of
these grounds.
We start with sales
performance.
Those dealers who have been around a while know that TADA
has, for many years, shepherded through the legislature a
statute designed to level the playing field somewhat between
manufacturers, distributors and dealers.
W
hen our offices first became involved representing franchised
dealers in the 1980s, the statute
was called the Texas Motor Vehicle
Commission Code. Ultimately, it became
known as Chapter 2301 of the Texas Occupations Code (“TOC”). This and future
articles will discuss this statute because it
should be of paramount interest to franchised dealers.
A statute which attempts to rewrite the
power equation incorporated into the most
tightly written adhesion contracts known
to man (i.e., the typical dealer agreement)
is, to put it mildly, subject to a great deal
Many if not most manufacturers/distributors use a sales performance formula
sometimes referred to as “RSI” or Retail
Sales Index. This is a statistical device
which allows the manufacturer/distributor to terminate those dealers that it wants
to terminate and keep those dealers that
it wants to keep, while, at the same time,
being able to provide a so-called scientific
or quantitative basis for termination with
which to dazzle the courts.
The way RSI works is that the manufacturer/distributor provides, in the franchise
agreement, that all dealers must, at all
times, maintain RSI 100.1 The way RSI
100 is calculated is that the manufacturer
adopts what it considers a reasonable,
benchmark, market-share average such as
national, regional, state or otherwhere. It
then multiplies that benchmark in percentage form against the industry registrations
within a dealer’s Primary Market Area
2011 FALL
9
(“PMA”), during a defined period of time, either on a segmented
or unsegmented basis. This calculation produces an “expectation”
for the dealer’s sales in any and all geographies. In other words,
the dealer’s total retail sales are expected to reach this level of
“expectation” produced by the equation. If it does, then the
dealer has achieved RSI 100 or what is sometimes called “sales
efficiency.” If they do not, then the dealer is in technical breach
of the franchise agreement.
Since, however, the benchmark used to calculate expectation
is an average, then it is subject to the law of averages and, therefore, at any particular point in time, only approximately 50% of
dealers will achieve RSI 100. The typical franchise agreement,
however, requires that all dealers must achieve and maintain
RSI 100 at all times. Consequently, approximately 50% of a
manufacturer’s/distributor’s dealers are in technical breach
of their dealer agreements at all times. The manufacturer/
distributor has the flexibility to call it a material breach or not.
It is this ambiguity which allows a manufacturer/distributor
to cherry pick the dealers that it wishes to terminate for sales
performance because it allows the manufacturer/distributor
to decide where in that lower 50% it will draw the line below
which termination occurs.
of the dealer’s PMA, the presence or lack thereof of intra-brand
competitors and their proximity to the dealer’s location and the
degree of out-migration from the dealer’s trade area. None of
these factors, of course, are subject to the dealer’s control and,
thus, it is, in part, a matter of fortuitousness whether any dealer
ever or consistently achieves RSI 100.
This conceptual roll of the dice is put forward, by the manufacturer/distributor, as the quantitative or statistical basis justifying
termination on sales performance grounds. Arbitrary or not, the
courts and agencies often buy into it because it sounds fair and
reasonable. But is it? Its reasonableness can be challenged under
the statute. Q
1
The “law of averages” generally means that when an average is calculated from a
set of data approximately 50% of the data from which it is created will fall above the
average and approximately 50% below.
2
“Demographics” may be defined as the study of human populations and their characteristics, such as size, growth, density, distribution and vital statistics, including
incomes and consumer preferences.
Our offices have represented franchised dealers exclusively for over 25 years.
We are here to help if you need us. Contact Wm. David Coffey, III at (512)
328-6612 or email: [email protected]
Q
Further, it has been established in more than one case that
a dealer’s ability to achieve RSI 100 is substantially dependent
on the demographics2 in the dealer’s PMA, the size and shape
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10
Are You Ready?
For the Automotive Industry Event of the Year
For the first time ever we will hold our NADA Convention and Expo in
conjunction with the ATD Convention and Expo in Las Vegas, Nevada!
Mark your calendar for February 3-6, 2012, to reap the benefits outlined below.
We promise:
䊳
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t Sergio Marchionne, CEO Chrysler LLC
t Aron Ralston, survivalist and inspiration for the film 127 Hours
t George W. Bush, 43rd President of the United States and
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䊳 Valuable face time with the manufacturers
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Money-saving early bird registration
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Voice of the Dealer…
TADA and AUTOPAC
Together Make
It Happen
TADA
Chairman Legislative
Committee
John Zwiacher
TADA
Chief Executive Officer
Legislative Affairs
Rob Braziel
AUTOPAC allows TADA to pool
the dealers’ resources so that we can
collectively support the pro-dealer candidates who have stood up for the retail
automobile dealers in the past and will
do so in the future. AUTOPAC and its
financial support for candidates is the
means to ensure that the voice of the
dealer is heard at the Texas Capitol.
Each year, TADA solicits all Texas
dealers for contributions to the PAC.
There are three levels of contributions
($1000, $1500, and $2500) that dealers
can select. These resources allow the
PAC to contribute roughly $350,000 to
candidates each election cycle.
Thanks to a major campaign in the
summer of 2010 led by then TADA
Chairman David Alderson and TADA
Legislative Chairman John Zwiacher,
we added 39 dealer contributors and
over $41,000 to the PAC. As a result,
the PAC had its best fundraising year
in the past six years ($215,500) and
the next best participation rate during
that time period. The PAC ended the
fundraising year with 200 total contributors, and 24 contributors at the
$2500 level.
Our goals continue to be to improve
both the participation rate and the
amount of funds raised by the PAC.
Along with the TADA Leadership,
AUTOPAC Trustees Ernesto Ancira,
Don Buckalew, Bob Hoy, and Jim
Janke are planning an aggressive
fundraising campaign for AUTOPAC
this fall.
The 82nd Regular Session of the Texas Legislature saw the
passage of SB 529, TADA supported legislation that strengthens
key provisions of the franchise law which governs the
relationship between franchised automobile dealers in Texas
and their manufacturers and distributors.
S
ecuring positive legislative responsiveness on major issues like those in SB 529
requires that dealers participate aggressively in the electoral process through
AUTOPAC, the TADA political action committee which supports state and
local candidates here in Texas.
12
Please be on the lookout for future
AUTOPAC solicitations and help us
do all you can to help fund the franchised dealer’s political action committee. The contributions you provide
are critically important to getting the
job done for the franchised dealers of
Texas at the Capitol. Q
THANK YOU!
DEALERS WHO HAVE CONTRIBUTED AT THE $2500 LEVEL TO AUTOPAC (2010 CALENDAR YEAR)
Cary T. Wilson
Eddie Bradley
Jim Brown
Robert Howard
Cliff Collier
Vicki Roberts Howard
Sam Pack
Skip Martin
Don A. Buckalew
Ron Wallace
Tom Durant
Frank Boggus
James L. Masten
Cecil Atkission
David Connell
David Alderson
John Zwiacher
Robert F. Boggus
W. Carroll Smith
Finley Ewing III
John Bass
Curtis C. Gunn, Jr.
Milton Greeson
Milton Killebrew
Ron Carter Autoland, Inc.
AutoInc.
Don Davis Ford Lincoln
Don Davis Dodge-Chrysler-Jeep
Howdy Honda
Lexus of Austin
Sam Pack’s Five Star Ford, LTD.
Martin Autopark
Buckalew Chevrolet
Mission Chevrolet, LTD.
Classic Chevrolet, LTD.
Boggus Motor Company
Beck & Masten Buick GMC, Inc.
Cecil Atkission Motors
Dodge Country
Alderson Enterprises, Inc.
Scoggin-Dickey Chevrolet-Buick-Hummer-Saab
Boggus Ford Lincoln
Momument Chevrolet
Ewing Autohaus, Inc.
Jim Bass Ford-LM-Mazda
Curtis C. Gunn, Inc.
Atzenhoffer Chevrolet-Cadillac Co., Inc.
Killebrew, Inc.
Alvin
Amarillo
Arlington
Arlington
Austin
Austin
Carrollton
Cleveland
Conroe
El Paso
Grapevine
Harlingen
Houston
Kerrville
Killeen
Lubbock
Lubbock
McAllen
Pasadena
Plano
San Angelo
San Antonio
Victoria
Victoria
TADSIG...
Creates Success For Auto Dealer Members
• $494,192 in surplus returned to member dealers to date
• Dealer membership has increased by 25% in 2011 YTD
• 6 years in operation, 6 years of solid financial performance
• At cost, buy from yourself approach to workers’ compensation
• Preferred risk workers’ compensation program exclusively for
qualifying TADA members
• Owned and operated by TADA members
Call Tim Akard at 512-636-6465 for more information.
w w w. t a d s i g . c o m
512.636.6465
2011 FALL
13
Texas Legislature
Takes Action
on Dealer Priorities
After 170 days in Austin, the 82nd
Regular Session of the Texas Legislature
and the First Called Special Session
concluded on Wednesday June 29, 2011.
I
mportantly, the Legislature was finally
able to pass a budget and implement
legislation that will allow the budget to
be certified as balanced for the 2012-2013
biennium. And this was done without
a change in the margins tax to bring in
additional revenue. While the budget,
redistricting, tort reform, immigration and
other controversial issues took the bulk of
the attention and time of the Legislature,
the Texas House of Representatives and
Senate did take and complete action on
a number of TADA legislative priorities
prior to adjournment.
TADA started the session with bills
in three key areas, and these are profiled
below. Further updates will be coming
on these issues as well as the other matters signed into law affecting the retail
automobile industry.
Manufacturer/Dealer
Franchise Laws
SB 529 (Sen. Joan Huffman-Author,
Rep. Todd Hunter-Sponsor)
SB 529 amends Chapter 2301, Occupations Code in several areas to improve the
regulation of the motor vehicle manufacturer/franchised dealer relationship. Major
changes in the structural underpinnings of
the retail automobile industry in the past
couple of years, including the bankruptcy
of major automobile manufacturers and
the loss of over 100 franchised dealerships
in the state, necessitated statutory updates
to address certain practices that threaten
the continued viability of Texas franchised
dealerships and the industry.
SB 529 preserves dealer property rights.
The legislation prevents a manufacturer or
distributor from using the franchise agreement to exercise exclusive control over the
use of the dealership property, unreasonably limiting or impairing the ability of
a franchised dealer to use the dealership
property as the dealer considers appropriate, or controlling the use of the dealership
property after the franchise is terminated
or discontinued. SB 529 also prohibits a
manufacturer or distributor from forcing
a dealer to sign a separate property use
agreement as a condition to entering into a
franchise, approving the addition of a linemake, approving a relocation of a dealership, or approving the sale or transfer of a
dealership. The legislation also terminates
any separate property use agreement when
a franchise terminates or the dealer alters the
exclusive use of the property in violation of a
property use agreement, but provides for the
reimbursement of any cash consideration
provided by a manufacturer or distributor
for a property use agreement in the event the
dealer alters the exclusive use of the property
during the term of the agreement.
SB 529 places reasonable time limits
on facility requirements. The legislation
ensures that a manufacturer or distributor cannot unreasonably mandate facility
changes at a dealership by providing that
a dealer is not required to alter the dealership to comply with a new program within
10 years of the completion of construction
to achieve compliance with a previous
program. This provision also applies to
any successor in interest at the dealership.
SB 529 allows a dealer to recover a
portion of the facility investments when
a manufacturer or distributor eliminates
a vehicle line-make within 2 years of
construction or upgrade of a dealership
facility. It allows a terminated dealer
to recover one year of dealership rental
value if the dealer has not constructed a
new facility within the last two years and
provides for the ability of the terminated
dealer to recover the value of the franchise
as it existed prior to the elimination of the
line-make.
SB 529 was signed into law by the
Governor on 5/27/11, and it becomes effective 9/1/11.
Texas Department of Motor
Vehicles
HB 2017 (Rep. Ruth Jones McClendonAuthor, Sen. Tommy Williams-Sponsor)
In 2009, the Texas Legislature created
the Texas Department of Motor Vehicles
(TxDMV) in order to separate the management of the vehicle divisions (Motor
Vehicle, Motor Carrier, Vehicle Titles
and Registration, and the Automobile
Burglary and Theft Prevention Authority) from the infrastructure development
functions of the Texas Department of
Transportation (TxDOT). The purpose
of separating the functions of TxDMV
and TxDOT was to increase the efficiency
and effectiveness of both agencies in the
service of Texas’ transportation needs.
During the 82nd Regular Session, the
Board of the new TxDMV, with the input
of stakeholders including TADA, sought
certain legislative revisions in HB 2017
to update the governance, organization,
duties, and functions of the TxDMV.
Prior to introduction of the bill, TADA
successfully argued for the removal of
provisions that would have eliminated
the advertising cure rule and limited
certain dealer protest rights unfairly.
The final version of the legislation alters
certain definitions, clarifies certain obligations of manufacturers and distributors, allows for the issuance of electronic
licenses, and provides a mechanism for
Board to delegate its functions by subsequent rulemaking.
Q
texas legislature — continued on page 17
2011 FALL
15
texas legislature — continued
HB 2017 was signed into law by the Governor on 6/17/11, and
it becomes effective 9/1/11.
Vehicle Registration and Titling
HB 2357 (Rep. Joe Pickett-Author, Sen. Tommy WilliamsSponsor)
HB 2357 was priority legislation for the TxDMV reorganizing Chapters 501 and 502 of the Transportation Code to largely
provide the framework for electronic titling and registration in
the future. TADA successfully sought amendments to preserve
important elements of the current system until electronic titling
and registration is accomplished.
Importantly, HB 2357 allows the TxDMV to establish service standards for the tax assessor-collectors and allows the tax
assessor-collectors to license and compensate dealers who perform registration and titling duties. In addition, the bill retains
the registration simplification regime enacted during the 81st
Regular Session and also makes the registration revisions for
used vehicles consistent with SB 1057 outlined below.
HB 2357 was signed into law by the Governor on 6/17/11, and
it becomes effective 1/1/12.
SB 1057 (Sen. Jeff Wentworth-Author, Rep. Linda HarperBrown-Sponsor)
S.B. 1057 will improve the process for registering used vehicles.
Under current law, a motor vehicle dealer is required to remove
each license plate and the registration insignia from a motor
vehicle when it is transferred to the dealer.
Prior to SB 1057, the part of the registration period remaining
at the time of the sale or transfer to the dealer continued with
the vehicle being sold or transferred and did not transfer with the
license plates or registration insignia. Given that the registration
period remains with the vehicle sold or transferred to the dealer,
a dealer has been required to determine the amount of time left
on the current registration of the vehicle and register the vehicle
for that period of time when the dealer sold the vehicle. This
has often led to errors in calculating the appropriate time period
and left the buyer with some fraction of a year for their initial
registration period.
To remedy these issues, SB 1057 terminates the registration
period remaining on the motor vehicle at the time of sale or
transfer to the dealer and requires the dealer to register the vehicle
for an entire registration period (one year) when the vehicle is
subsequently resold. The process will be simplified as a dealer
will not be required to calculate a registration period and the
new owner will obtain a full year on their vehicle registration.
SB 1057 was signed into law by the Governor on 6/17/11, and
it becomes effective 9/1/11. Q
2011 FALL
17
Ramsay Gillman
A Tribute to
BY KAREN PHILLIPS
R
1944 – 2011
amsay Gillman was the “Everyman” dealer. He understood the needs of and the need for the small, the midsized, and the large dealer.
One of Ramsay’s oft-repeated sayings to the ever-enduring
motor vehicle industry was that “there are two things in life
every young man wants and I sell one of them.”
Ramsay gave back to the industry that he loved by accepting an appointment on the Texas Motor Vehicle Commission
in 1984 and then on the Texas Department of Motor Vehicle
Board in 2009. He was the President of HADA, a TADA Vice
Chairman, and President of NADA. TADA honored Ramsay
with a lifetime achievement Automotive Legends Award in
2009, an induction by daughter Stacey that left him speechlessperhaps for the very first time.
His zest for life was his way of life. He understood that
risking nothing means risking everything. I miss Ramsay’s
jokes, his counsel, and his friendship and I know you do too.
“Whereas, a full, over-the-top and
incredible life came to an end with the
passing of Ramsay Gillman on June 3,
2011 at the age of 67;
“And whereas, the native Houstonian
and sixth generation Texan began his
automotive career working in the parts
department of his father’s Pontiac dealership located in downtown Houston,
and after attending the General Motors
Dealer Management Institute and other
specialized schools in 1967, a 23-year-old
Ramsay Gillman became an authorized
automobile dealer;
“And whereas, Ramsay Gillman
served as president of the Houston Automobile Dealers Association, appointed
18
The following resolution was presented to his children
Stacey, Jason, and Christopher by Victor Vandergriff, Chair,
at the Texas Department of Motor Vehicles Board meeting,
July 14, 2011.
in 1984 by then-governor Mark White,
Ramsay ser ved three years as vice
chairman of the Texas Motor Vehicle
Commission, Ramsay was the director
of the National Automobile Dealers Association from 1989 through 1999 and
he chaired various committees of this
association from 1993 through 1999,
and most recently Ramsay was serving
as the chairman of the board of the Gillman Companies, a trustee for the National Automobile Dealers Association
Political Action Committee, and as an
appointed board member by Governor
Rick Perry to the Texas Department of
Motor Vehicles;
Award from the American International
Automobile Dealers Association for his
life commitment to the automobile business and charitable organizations, and
again in 1997 an official Texas House
of Representatives resolution passed on
behalf of his outstanding achievements
over his years of philanthropy;
“And whereas, Ramsay received the
1996 Sports Illustrated All Star Dealer
“And whereas, Ramsay was dedicated
to his wife, Stevie, and to their children,
“And whereas, Ramsay Gillman supported the Fort Bend County Women’s
Center, the Ronald McDonald House,
Houston Livestock Show & Rodeo
Youth Scholarship Program, Sickle Cell
Association and Muscular Dystrophy
Association;
Stacey, Jason and Christopher. Ramsay
had an extraordinary ability to lead and
inf luence change, he instilled honesty,
integrity and customer service values in
his children and prepared them to lead
the Gillman Companies. Ramsay believed
and lived the concept of work hard and
play hard that included Ramsay’s plans of
adventure with his grandchildren, Grace,
Frankie, Jace and Cavan;
Vehicles pays tribute to the
hee life
h
liiffe off RamR am
mssincerest
inccer
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o the
th
hee
say Gillman and extends si
r iien
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n
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hee
h
members of his family, ffriends
oy
yee
eess,, and
and
d be
be it
it
Gillman Company employees,
o
f fi
f icial
cial
ci
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op
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of
further resolved that the of
official
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h
is fa
ffamily
am
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this resolution be prepared
for
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epart
paarttm
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and that when the Texas D
Department
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ay
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it d
oe s
oe
Motor Vehicles adjourns this
day,
does
i l llm
il
man.”
an.”
an
” Q
so in memory of Ramsay G
Gillman.”
“A nd whereas, R amsay Gi l lman
was not afraid to step into the foreseeable conf lict, he was a mentor, guide
and friend who displayed a contagious
positive demeanor, he enriched us with
his story-telling, displayed mastery on the
golf course and hunted and fished with
expertise;
“And whereas, work and leisure were
Ramsay’s excuses to meet people. We were
grateful he had those excuses throughout
67 years of a joyful life;
“Therefore, be it resolved that the
Board of the Texas Department of Motor
2011 FALL
19
BY RACHEL INGRAM
W
hen Don Hewlett was a high
school freshman, he came home
from Boy Scout camp to find a
black Chevrolet parked outside his house
in Lockhart, Texas. “Is there somebody
here visiting?” he asked his dad. “Nope,”
said his dad, the 1931 Chevrolet two-door
sedan was now Don’s. For a guy whose
life would revolve around cars, and whose
success and goodwill would make him a
pillar of Georgetown, that sedan was a
modest start.
Don Hewlett driving car for Patty Pope (later
Hewlett), Duchess of Lockhart
“It had a motor and a transmission,”
laughs Don. “No radio, no heater. I had
my girlfriend, Patty—who became my
wife—sitting next to me. She was my
heater.” Today he drives an Equinox, and
for long trips, a Tahoe. “I’ll always drive a
Chevrolet,” he says. “Like Coach Darrell
Royal said, ‘You gotta dance with who
brung you.’ Well, Chevrolet brung me to
this situation here.”
This situation involves owning the largest Chevrolet dealership in Central Texas.
It’s also the third largest in the state and
sixteenth of about 4,000 Chevy dealers
nationwide. This situation also involves
taking pride in his adopted hometown,
supporting its community and businesses,
and generally being a good guy.
The Hewlett dealerships have prospered over the years for three specific
reasons. First is the company’s ability to
2011 FALL
21
I wanted to have my own dealership or a
part of my own dealership by the time I
was 35 years old.
attract and retain good employees by appreciating and rewarding them in meaningful ways. One of Don’s employees just
retired after more than 50 years of service.
“We’re only as good as the people we have
working with us,” Don says.
Second is providing complete customer
satisfaction and following up with customers. “Make sure that they are completely
satisfied to the best of your ability,” says
Don. The final element to the Hewlett
dealership’s success is passion. “You have
to be passionate about whatever you do,”
he says. “If you show that enthusiasm, first
your employees will pick up on that, then
your customers.”
And Don’s enthusiasm reaches well
beyond the dealership. When he started
to attain modest success, Don decided it
was time to give back to the community.
So he joined the Georgetown Chamber
of Commerce’s board of directors in
1973, and stayed there for eight years,
serving as its president twice. With a
22
population of around 6,000, Georgetown had a smaller business community
then, but Don learned a lot about the
town and its needs.
He remembers chatting with Harry
Gold, owner of Gold’s Depar tment
Store—now the Gold Building—on the
Square. “He would say, ‘Now, Hewlett,
we’ve got to take down those big boys
in Austin. We’ve got to really hustle and
outwork them, and we’ll get their business
from them,’” remembers Don. He took
that advice to heart.
In other community-minded activities
over the past 40 years, Don served two
terms on the Georgetown Independent
School District Board of Trustees, one
term each as president of the Rotary Club
and Lions Club, and he’s held several
church offices. Among other philanthropy, Don and his wife built a new room for
the Georgetown Public Library, as well
as a room for the Wesleyan at Estrella
Retirement Home.
This all started with Don’s love of cars.
He initially became infatuated with them
as a boy in Lockhart, when new-car production picked up after World War II. His
first jobs beyond the family farm were at a
service station and the local Chevy dealership. The only job he’s ever had outside
the car industries was with Humble Oil
Company, which helped pay for his tuition
at the University of Texas at Austin. “I did
that for five summers,” says Don. “I liked
it. It was hard, hard work. I made a big, big
check of about $1.75 an hour, which was
a lot of money back then. All my friends
were making about 50 cents an hour.”
Once he graduated from U.T. in 1958,
Don went back to the automobiles, selling
his beloved Chevys at Capitol Chevrolet
in Austin. He worked his way up to sales
manager and developed a strong relationship with dealer Charles Nash, who
served as the dealership’s chairman until
he passed away in March. Along with
Don’s father Lan Hewlett, Nash was one
of Don’s mentors and role models. Other
“car men” who had an impact on his life
include Mose Glosserman, a successful
Chevy dealer in Lockhart, H.G. Pope, and
Buster Compton, the man whose phone
call brought Don, his wife, and their four
children to Georgetown.
Mike, the youngest of the three, manages
the dealership’s customer relations for
the service, parts, and body shop departments. Like his father before him, Mike is
serving on the G.I.S.D. Board of Trustees.
“I’m blessed to have all three of my sons
involved in this business,” says Don. “I’m
proud of those three boys and our daughter
Kathy and her husband, Brad Pharr, who
live in Round Rock.”
Buster helped Don reach one goal he’d
always had. “I wanted to have my own
dealership or a part of my own dealership
by the time I was 35 years old,” says Don.
“I missed it by 20 days. That’s just the way
it worked out, but you always have to stay
focused, focused, focused.”
He and Buster formed downtown
Georgetown’s Compton Motors in 1971.
When Buster passed away in 1983, Don
bought the company’s remaining stock
and became the only dealer. “The good
Lord was taking care of us when he offered me the opportunity to move to
Georgetown,” says Don. “It’s been a great
experience. This is a fantastic community
and we are totally blessed to live here. I
think most of the people here realize that.”
When Don’s Chevrolet-OldsmobileBuick dealership outgrew its downtown
facilities around the year 2000, he moved
the dealership onto property near the
IH-35 Westinghouse Road exit. “Our
business immediately tripled,” he says.
“And we’re selling between three and
four hundred units a month. That’s a big
accomplishment for anybody, particularly
in this time.”
All three of Don’s sons are involved in
the business now. In fact, they own the
Volkswagen dealership that opened with
the move in 2000. While Don still keeps
his hands in, his eldest son, Don Ross
Hewlett, handles most of the day-to-day
management at the dealership. Second
son David spends half his time at the
dealership, and the other half working as
an attorney at a major Austin law firm.
Surprisingly, after 53 years of the cardealing business, and after relinquishing
managerial duties to his sons, Don still
enjoys coming to work. “I’m 75 years old,
but I still have that fire in my belly and
want to come to work every so often to be
somewhat of a role model to the group I
have here,” he says.
His office is right on the Chevy dealership’s showroom floor, where he can watch
customers arrive. He still likes to go out
and thank each one for coming in. “They
are very, very surprised most of the time
that there’s a real Don Hewlett sitting here.
‘You’re the Don Hewlett?’ ‘Yes, I am, and I
really thank you for coming in, today.’” Q
2011 FALL
23
“My focus is running my
dealership—not worrying
if my business is protected
or how to generate
income in my finance
department. Zurich lets
me do that.”
One insurance company for your business
insurance and F&I product needs
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services are not available in all states. ©2011 Zurich American Insurance Company
TEXAS DEALER ACADEMY
“Leadership Development for
Today and Tomorrow”
T
ADA would like to invite any future dealers (sons, daughters, family members and key dealership personnel) who are
approximately the age of 20 to 40 and are actively working in
the dealership to become a member.
The TDA is open to individuals who want continuing
automotive education, an opportunity to network with other
young dealers and to benefit from the expertise of TADA staff,
state officials and representatives of key state agencies. The
structured program consists of educational and operational
training which will prepare candidates for the role of Dealer
Principal and nurture friendships in the automotive industry
that will last a lifetime.
vehicle, learning each week from a comprehensive dealership
operations training program provided by NADA University.
Please give your young dealer an opportunity to join the
TADA Texas Dealer Academy in preparing to be the future
of the Texas Automotive industry.
Learn more about this exciting new program for
young Texas dealers. The next meeting is scheduled for October 19-20 in San Antonio.
Details on the TADA
website – www.tada.org Q
There are currently over sixty enthusiastic members from all
over Texas, from every size town, representing every make of
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2011 FALL
25
Gillman Auto Group Partners with NBC’s Today Show
“Lend a Hand Charity”
The Gillman Automotive Group through their Gillman Care’s Program partnered with
NBC’s Today Show “Lend a Hand Charity” to surprise a local Houston charity,
Casa de Esperanza de los Niños – The House of Hope for Children.
A
s a part of their in-kind donation,
Gillman Auto Group will help
further support Casa de Esperanza
and its endeavor to care for children by
providing them with a Chrysler Town and
Country van.
The Today Show aired live from the
Houston based charity neighborhood.
“Lend a Hand” is a series on the NBC
Today Show where Al Roker travels to 5
cities in 5 days helping out 5 charities. The
sponsors, including Gillman Automotive
Group, generously donated a total of $2.7
million in goods to Casa de Esperanza.
Active in multiple philanthropic causes,
26
Stacey Gillman Wimbish, President of
Gillman Auto Group, was enthusiastic
about making this donation. “Gillman
Auto Group is excited by this opportunity
to support Casa de Esperanza and provide
them with a vehicle that will enable them
to further their dedication to children in
need,” said Wimbish.
Al Roker and NBC’s Today Show
took over Houston on June 15th as part
of the 10th Annual “Lend a Hand Charity” event in hopes of providing Casa de
Esperanza with the means to grow their
outstanding organization. “It is an honor
and a privilege for Gillman Auto Group
to represent the local Houston business
community in something that makes such
an impact on bettering the lives of these
children,” noted Patrick York, Gillman
Auto Group Chief Operating Officer. Q
About Gillman: The Gillman Automotive Group
is a highly successful 70-year old Houston based
chain of family owned and operated automobile
dealerships serving the Houston, San Antonio and
Rio Grande Valley Markets. For more information
visit www.gillmanauto.com.
About Casa De Esparanza: Casa de Esperanza de
los Niños—the House of Hope for Children—is
a safe place for children in crisis due to abuse,
neglect or the effects of HIV. Casa de Esperanza
provides residential, medical and psychological
care according to the needs of each child.
DeMarcus Ware:
How I Spent My Lockout
I
’ve been spending a lot of time lately in the service department of a Hummer dealership in Grapevine, Texas, not too
far from the DFW Airport and Valley Ranch, the Cowboys’
headquarters. And I don’t even own a Hummer.
Actually, the Hummer dealership is closed. I know the owner,
Tom Durant, and he was gracious enough to let me turn the
service area into a makeshift gym so I can stay in shape during
the lockout.
We’ve probably got some of the best weight-lifting equipment
around the league in there, including free-motion weights which
a guy donated, ropes and a device called “The Flipper” which
simulates a tire that you can flip.
Some guys don’t have contracts. Some of them don’t even
know if they’re going to be with the Cowboys next season. But
they’re out there working out, hoping that Jerry Jones and the
rest of the NFL owners are going to do the right thing and get
this collective bargaining agreement worked out.
It hasn’t been all work and no play for me during the offseason.
I’ve done some traveling. My wife, Taniqua, and I flew to Los
Angeles and attended one of the “American Idol” shows. She’s
a big fan.
I’ve been able to spend more time than usual with my kids,
which has been a great thing. We have a 3-year-old daughter,
Q
lockout — continued on page 30
It’s a really exclusive gym. You won’t find another one like it.
Several of my teammates have been working out with me, including defensive end Stephen Bowen, fullback Chris Gronkowski, offensive tackle Robert Brewster and several other linebackers
-- Brandon Williams, Victor Butler and Anthony Spencer. I told
them they could work out for free for the first month. After that,
they’ve got to start paying monthly dues.
Hey, I’ve got to pay rent, you know?
We usually work out four days a week: Monday, Wednesday,
Thursday and Saturday. The reason we work on Saturday is
that way I can keep them honest on Friday, so they don’t go out
partying. You can tell who’s been out late Friday night by the
way they move around on Saturday.
I’m not really worried about staying in condition myself.
I’m more worried about making sure that all of the team stays
ready and comes in conditioned and ready to go once the
lockout is lifted.
There are a lot of guys on our team like Tony Romo, Bradie
James, Keith Brooking and Jason Witten who are stepping up
and being great leaders right now. They’re reaching out to other
players -- by text, emails or phone calls -- and stressing how important it is to stay in shape. Everybody is coming together and
showing how important it is that we’re still keeping it together as
a team even though we don’t have an agreement with the CBA.
2011 FALL
29
It’s a Whole Lot
Cooler in Hood
County, Texas
worked the phones and the word spread
quickly. And in just two and a half weeks,
Classic of Granbury collected 318 fans for
Mission Granbury, a 501(c )(3) nonprofit
organization dedicated to provide the
emergency assistance essential to the wellbeing of the community. “We couldn’t
believe how many fans we were able to
collect in such a short time,” said Skip.
“It’s really a tribute to the generosity of
our community.”
Thanks to One Granbury Car Dealership
A
s North Texas enters it’s 2nd month
with temperatures exceeding 100
degrees, no one needs to be reminded
how oppressive the heat is, particularly
those who do not have air conditioning.
And there are plenty of folks in Hood
County, Texas that simply cannot afford
the luxury of air conditioned homes or
even sufficient fans to keep them cool. So
Skip Bergen, executive manager of Classic
Chevrolet Buick GMC in Granbury and
his team of 92 employees decided to do
something about it. “This summer is just
unbelievably brutal and it’s not getting
any cooler,” explains Skip. “We knew we
could do something to help if we just put
our minds to it and worked as a team.”
Beginning July 6th, Classic of Granbury
kicked off the “Fans for Hood County
Drive”, encouraging the community to
drop off electric fans to the dealership for
donation. Dealership employees zealously
Marley, and a 4-month-old son, DeMarcus Jr.
One other thing I’ve been trying to do is get out in the community more and give back. I’ve been doing some mentoring
and helping kids out, and also talking to some fans. Instead of
seeing you on Sunday, now they see you on Tuesday.
Working out at the Hummer dealer has been great. I’m
grateful to have a place where I can get my workouts done.
But I’m really looking forward to getting back inside Valley
Ranch and being with all of the guys. Q
How will Mission Granbury get the
word out to those in need? “All we have
to do is give that first one away and the
news will spread like wildfire. They’ll be
lining up,” said Dan Coates. And with
temperatures climbing even higher as August approaches, there will be no shortage
of need. Classic Chevrolet Buick GMC in
Granbury will continue to take any fan
donations throughout the summer and
pass those along to Mission Granbury. Q
Cowboys Workout
lockout — continued
30
On July 25th the dealership delivered
the fans to Dan Coates, Board Chairman
of Mission Granbury who was astounded
by the contribution. “This is the first time
since I’ve been with Mission Granbury,
that a single business took it completely
upon themselves with no outside influence
to do something like this. It’s incredible.
To say we’re ecstatic would be an understatement.” The dealership mixed no
business with their philanthropy, making
no sales pitch to those who brought fans to
the showroom. “The community has been
very good to us here in Granbury,” said
Skip. “This was time to just give back.”
B
ecause of the NFL lockout, the Dallas Cowboys players
were prohibited from working out at Valley Ranch, the team
facility. DeMarcus Ware, Cowboys linebacker and one of the
team leaders, wanted to keep his group of guys working out.
His trainer is friends with Tom Durant, and Tom offered his
former Hummer facility to the players. They have converted
the showroom into a workout facility. DeMarcus Ware really
wanted to keep his group focused, in shape and maintaining a
regiment. He felt it was important for building team camaraderie and keeping physically ready to play. Six to nine players
worked out regularly at the former Hummer facility, including
DeMarcus Ware - linebacker, Anthony Spencer - linebacker,
and Stephen Bowen - defensive lineman. Q
ATD Truck Dealer of the Year
Richard (Dick) Kane was one of five
nominees in the United States
Five commercial truck dealers from across
the country were nominated by their peers for a
national industry award presented by the American Truck Dealers and Heavy Duty Trucking
magazine. The award recognizes excellence in
business practices, industry leadership, civic
contributions and community service.
Richard Kane
Kane began his career in truck retailing when he purchased
Grand Truck Center in 1969 and began selling and servicing
Ford trucks. More than 40 years later, Kane is still owner of the
dealership, which now sells Ford, Western Star, Volvo, Mack and
Autocar trucks at two locations in San Antonio. The dealership
also offers leasing, fleet management, service, parts and financial
services. In addition to the dealership, Kane also owns real-estate
firms Bulldog Realty and R.S. Kane Realty. Q
2011 FALL
31
Why Can’t I Get My Car
Serviced at the Dealership?
The dealership service department uses original-equipment parts
installed by factory-trained technicians, and routine service is
competitively priced—but isn’t always open nights or Saturdays.
I
n a class of 35 students, typically 10
tell me their stores are open in the evening for service, and four for Saturday
service. How many stores are open on
Sunday to sell cars? Twelve. Of those,
how many are open for service Sunday?
Just one. This service department operates 8 a.m. to 9 p.m. Monday to Friday, 8
a.m. to 5 p.m. on Saturday, and 9 a.m. to
4 p.m. on Sunday—and is doing it right.
What about the other dealerships that are
forcing their customers to go somewhere
else for service?
Think about it. Do you really believe
that your customers will take a day off
work to service their cars with you? Have
32
you surveyed customers about convenient
hours? My definition of CSI is “Customer Supplies Income.” And there’s too
much competition—open evenings and
weekends—waiting to take care of your
customer.
When you sell a new vehicle, you hold
5 percent gross. You hold 11 percent for
used. Parts sales bring 38 percent gross.
When you sell labor, you hold 70 percent
gross. I’ve heard that dealerships make
up only 6 percent of service facilities but
generate 41 percent of the revenue—and
that unperformed maintenance adds up
to $56 billion. So why aren’t dealerships
open 24/7?
With that said, try this: Open service
on Tuesday and Thursday nights until 9
p.m. for used-car reconditioning and newvehicle PDIs. Saturday, operate 8 a.m. to
5 p.m. Most dealers with Saturday service
that I’ve talked to say Saturday is their
busiest day.
While sales sells the first car, service
sells the second. All dealerships should be
open until 9 p.m. Monday through Friday,
8 a.m. to 5 p.m. Saturday, and open for
Sunday service if open for Sunday sales. Q
This ar ticle was writ ten by NADA Academy
instructor Bob Atwood. For more information on
Academy and other NADA University training, visit
www.nadauniversity.com or call NADA U customer
service at 800-557-6232. Please also visit www.
NADAuniversityblog.com for NADA University’s
“Dealer Pain Points” series, in which various issues,
concerns, and dealer compliance obligations are
addressed in short video segments with NADA U
experts. The experts “resolve” each Pain Point,
and the viewer is directed to a wealth of NADA U
resources on the topic.
Is Your Cash Stuck in “Park”?
Shift to “Drive” with the Right Inventory!
Running a dealership would be easier if your cash moved as fast
as the vehicles you sell. Unfortunately, some of your cash is going
nowhere fast. And some of it is on the fast track to depreciation—
stuck in “park,” sitting on your used-car lot.
there,” he said. There’s more to it. You
have to dig deeper.”
U
buy something that maybe we’ll sell. We
want to turn that inventory.”
•
•
•
•
•
According to NADA Academy instructor George Grabowski, “A rule of thumb
is a 45-day supply of used vehicles with
no vehicle in stock longer than 60 days.
Prices usually drop dramatically when we
start getting in the 40- and 50-day cycle.”
Sometimes managers focus too much
on gross and not enough on cash flow.
Sometimes they ignore the cost of that vehicle sitting on the lot day in and day out.
The sooner you sell the inventory, the
quicker your capital finances a fresh supply of used vehicles. NADA’s guideline:
Turn over used-vehicle inventory 12 times
a year.
Grabowski gave an example: “Let’s say
it costs $30 a day to keep the car on the lot.
If you keep it for 90 days, that’s $2,700. If
you sell it, and you hold $2,500, you’re
thinking, ‘This is great. I made $2,500
gross profit.’ But the department actually
netted a loss of $200.
sed-vehicle sales helped many dealers survive when new-car sales took
a nose dive. Many customers want
or can only afford a used vehicle. Do you
have the right mix of vehicles to offer? Are
you tying up capital with vehicles nobody
wants to buy?
Grabowski said, “Let’s not wait 60
days. Let’s get rid of a used car now so that
we minimize our losses at the auction and
In class, Grabowski emphasizes setting
parameters. “Do they have a policy?” is his
first question. His answer: There should be
a policy to review the used-vehicle inventory every day.
In assessing your usedvehicle operations,
determine:
How old is too old?
How many do you have?
How did you get those vehicles?
Who bought them and why?
Did you spend too much at the auction
or on reconditioning?
• Did you buy a vehicle that doesn’t
match your target market?
These are all issues addressed in
NADA Academy classes, NADA University online courses, and Driven management guides. Q
Watch the video on this Pain Point to learn more.
Go to w w w.NADAuniver sit yblog.com/used vehicles-cash-flow/. This article was adapted from
NADA University’s “Dealer Pain Points” series,
in which issues and concerns are addressed in
short video segments with NADA U experts.
The experts “resolve” each Pain Point and then
the viewer is directed to the wealth of NADA U
resources on the topic. Find the entire library at
NADAuniversityblog.com.
“So, this is the type of analysis that you
don’t just do one calculation and you’re
SEND US YOUR STORY!
TADA is very proud of the service each of our members provides to their community, the
automotive industry, and to the state of Texas.
Let us know if you have a story to share with other members of the Association, the public, and
policy makers.
To be included in a future Dealers’ Choice issue, please send your information and photos to
Donna Norton at [email protected] or call 512-476-2686.
2011 FALL
33
TADA Advertiser Index
Fall 2011
Attorney
Counts & Bonacci, LLP. ..........................................................Page 31
Johnson, Deluca, Kurisky & Gould, P.C. ..............................Page 13
Wm. David Coffey, III & Associates ......................................Page 36
Automobile Training
First Innovations, Inc. ............................................................Page 14
Banking/Finance
Bank of America/Merrill Lynch ..............................................Page 8
Construction Management
Teal Construction Company .................................................Page 20
The Ratliff Group, LLC .............................................................Page 5
Dealership Buy-Sells
Dick Nokes Consulting, LLC .................................................Page 29
Dealership Management Systems
Auto/Mate® Dealership Solutions ...................................... Page 25
Dealership Valuations
Richard W. Nokes, P.C., CPA, CVA .......................................Page 29
Finance & Insurance Development
First Innovations, Inc. ............................................................Page 14
ª3121!Ufybt!Nvuvbm!Jotvsbodf!Dpnqboz
F&I Training/Products
American Financial & Automotive
Services, Inc. ........................................................Page 28 & Page 35
Foresight Services Group .......................................................Page 3
Insurance
American Fidelity Assurance................................................Page 16
Federated Insurance ..............................................................Page 10
Sentry Insurance ....................................................................Page 27
Texas Mutual Insurance Co. .................................................Page 34
Texas Auto Dealers Self Insurers Group .............................Page 13
Zurich American Insurance Company .................................Page 24
Sales Training
Foresight Services Group .......................................................Page 3
Service Contract
First Innovations, Inc. ............................................................Page 14
Pvs!3121!xpslfstÖ!dpnq!npefm!dpnft!gvmmz!mpbefe!bu!op!fyusb!dibshf/!
ShipCarsNow ...........................................................................Page 7
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Uniforms & Facility Services
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Transportation/Internet
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Drive new profit in your dealership.
New profit center
t
Increase CSI
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Maximize customer loyalty
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Texas Automobile Dealers Association
1108 Lavaca, Suite #800
Austin, TX 78701
THIS MAGAZINE IS DESIGNED AND PUBLISHED BY MEDIA COMMUNICATIONS GROUP 1.888.745.4003
PROVIDING
LEGAL
SERVICES TO
AUTOMOBILE
DEALERS
Wm. David Coffey, III & Associates has specialized
in representing franchised new motor vehicle
dealers in civil and regulatory proceedings against
manufacturers and distributors for over 25 years.
It’s what we do.
[t] 512.328.6612 | [f] 512.328.7523
e-mail: [email protected]
13810 FM 1826 | Austin, TX 78737
www.wdcoffeylaw.com
Wm. David Coffey, III
Board CertiÀed Administrative Law
Texas Board of Legal Specialization
WM. DAVID COFFEY, III
&
A SSO C I AT ES