2010 - Orange County Automobile Dealers Association OCADA

SPRING 2010
Volume 50, Issue 1
OCADA Auto Tech Team Wins
National Championship
The Official Publication of the Orange County Automobile Dealers A ssociation
OC Dealer is a publication of Media
Communications Group and is the of ficial
publica t ion of Or ange Coun t y Au tomobile
Dealers Association. OC Dealer is published 4
times per year by Media Communications Group.
The statements and opinions expressed herein
are those of the individual authors and do not
necessarily represent the views of OC Dealer,
or its publisher Media Communications Group.
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.
18
11
The “Opening Statements to Negotiations Can Make All the Difference”
OCADA in the District
21
Health Care Reform – Immediate Impact
4 Calendar of Events
6 President’s Message
8 2010 OCADA-PAC Honor Roll
9 Dealer Day A BIG Success!
11 OCADA in the District
12 17 Years of Commitment to High School Automotive Programs Brings Home National Championship
15 Free Labor Law Hotline
17 Get to Know Your Legislator:
Visit us Online!
www.OCADA.org
Congresswoman Loretta Sanchez
18 The “Opening Statements to Negotiations Can Make All the Difference”
19OCADA Welcomes Our New Associate Members
20An Update from Capitol Hill
By Congressman John Campbell
21 Health Care Reform – Immediate Impact
OC DEALER is a Publication of the
Orange County Automobile Dealers
Association
3737 Birch St., Suite 220
Newport Beach, CA 92660
www.ocada.org
Phone: 949-428-5050
Fax: 949-428-5054
SPRING 2010 3
Board of
Directors
PRESIDENT
John Patterson
Huntington Beach Mazda
OC Hyundai
Tustin Mazda
Calendar of Events
June2
Steve Richards Sales Training Seminar
The Objection Handling and Closing Formula
National University, Costa Mesa
June7
July 8
46th Annual OCADA Golf Tournament
Mesa Verde Country Club
Used Car Dominance by Dale Pollack
National University, Costa Mesa
VICE PRESIDENT
Tim Mullahey
Mullahey Chevrolet
Fullerton Kia
Sexual Harassment Prevention Training
Presented by: Fisher & Phillips, LLP
National University, Costa Mesa
TREASURER
George Heidler
Suzuki Depot/Kia Depot/
Tom’s Truck Center
IMMEDIATE PAST
PRESIDENT
Paul Lunsford
South Coast Toyota
July 14
August 4
Steve Richards Sales Training Seminar
Justifying the Trade Value
National University, Costa Mesa
October6
Steve Richards Sales Training Seminar
Justifying the Price
National University, Costa Mesa
October7-10 Orange County Auto Show
Anaheim Convention Center, Anaheim
EXECUTIVE
DIRECTOR/SECRETARY
John Sackrison
Orange County Automobile
Dealers Association
DIRECTORS
Paul Conant
Norm Reeves Honda Huntington Beach
Mike D’Amato
Tustin Lexus
Jon Gray
Orange Coast Chrysler Jeep Dodge
Matt Gunderson
Audi Mission Viejo
Infiniti of Mission Viejo
Bruce Hamlin
Guaranty Chevrolet
4
OC Dealer WWW.OCADA.ORG
46th Annual
OCADA Golf
Tournament
Monday, June 7th, 2010
Mesa Verde Country Club
Sign up Today!
Do not miss out on one of Orange County’s
BEST Golf Tournaments!
This year’s tournament includes bars and fun on the course along
with the lawn bowling contest and the helicopter drop.
8:30am - 10:30am • Registration & Breakfast
10:30am • Shotgun Start
5:00pm • Awards Dinner
To sign up or for more information, please contact:
Cristin Collings at (949) 428-5050 or [email protected]
President’s Message
Dealer Day, What an
Incredible Event!
I
recently went to my first Dealer Day
in Sacramento and have to admit I
was hesitant to spend the day away
from my stores, but — WOW what an
incredible event!
It was a fast paced day that began
with Meg Whitman and Lieutenant
Governor Abel Maldonado addressing
over 100 dealers, followed by a current
dealer issues briefing. Next, we were off
to the Capitol to meet with our Assembly
members and Senators and later hosted
a dinner with them and the Orange
County dealers.
Two things really struck me that
6
OC Dealer WWW.OCADA.ORG
day: One is just how much is done
to protect and promote the dealers
interests in this state — not just
on Dealer Day, but every day. You
have an excellent team of seasoned
professionals that each day are fighting
on our behalf. The second thing was the
opportunity to build relationships with
my fellow dealers, our lobbyists and of
course our legislators. I walked away
with valuable contacts and resources,
as well as a new friendship with my
Assemblyman, Jim Silva.
While Dealer Day is a once a year
event, activities to protect and promote
our businesses are constant, as well as
John Patterson
opportunities to participate. Here are a
few ways to get involved:
• Join us for Lunch with Your Legislator
• Deliver a check from you Federal,
State or Local PAC to your legislator
• Contact your legislator when a
legislative alert is distributed
With al l levels of government
becoming more active in our business,
it’s only fair for us to return the favor! n
Sincerely,
John Patterson
2010 OCADA-PAC Honor Roll
Chairman’s Club
AJ D’ Amato
Bruce Hamlin
Tim Mullahey
Trey Selman
James Barone
Dennis Hardin
John Oh
Jim Speck
Norris Bishton
Roberta Hardin
Woody Oklejas
David Wilson
Dave Conant
George Heidler
Al Parajeckas
Tom Winterling
Tom Ferruzzo
Dick Hsu
John Patterson
Jim Graham
Paul Lunsford
Bill Piercy
Jon Gray
Bob Miller
RJ Romero
Join the OCADA-PAC Honor Roll and make your contribution today!
8
OC Dealer WWW.OCADA.ORG
Dealer
Day
A BIG Success!
Special Thanks to the
Chairman’s Club delegation who
joined us for CNCDA’s Dealer
Day 2010!
Left to right: George Heidler, Suzuki/Kia Depot/Tom’s Truck Center;
Bruce Hamlin, Guaranty Chevrolet; Assemblyman Jose Solorio, 69th
Assembly District; Alton Burkhalter, Burkhalter Kessler Goodman &
George LLP.
Left to right: Assemblyman Jeff Miller, 71st Assembly District; Dave
Braun, Comerica Bank; Dave Conant, The CAR Group; Jim Graham,
Santa Margarita Ford; Michael Sieving, Law Offices of Michael Sieving;
Assemblywoman Diane Harkey, 73rd Assembly District; Woody Oklejas,
Law Offices of Michael Sieving; Al Parajeckas, Crevier BMW; Tom
Ferruzzo, Ferruzzo & Ferruzzo LLP.
Left to right: Dick
Hsu, DCH Tustin
Acura; Assemblyman
Van Tran, 68th
Assembly District;
George Heidler,
Suzuki/Kia Depot/
Tom’s Truck Center.
OCADA Dealer
Day Delegation,
Sponsors and
Orange County
Legislators meet
at CNCDA’s
Legislative Dinner
during Dealer Day.
SPRING 2010 9
in the District
Assemblyman Jim Silva
Dealers in the 67thAssembly District met with their Assemblyman Jim Silva
at one of OCADA’s Legislative Luncheons.
Left to right: Paul Conant, Norm Reeves Honda Huntington Beach; Bob
Miller, Toyota of Huntington Beach; Vikki Murphy, Wilson Automotive
Group; Assemblyman Jim Silva; John Patterson, OC Mazda
Senator Mimi Walters
Dealers in the 33rd Senate District attended an OCADA Legislative
Luncheon to meet with Senator Mimi Walters.
Left to Right: Tom Ferruzzo, Ferruzzo & Ferruzzo LLP; Aubrey Hardin,
Hardin Automotive Group; Mike D’Amato, Tustin Lexus; Roberta Hardin,
Hardin Honda; Trey Selman, Selman Chevrolet; Mark McKellop, Acura of
Mission Viejo; Senator Mimi Walters, 33rd Senate District; Jim Graham,
Santa Margarita Ford; David Conant, The CAR Group; Gina Zari, 33rd
Senate District; Tim Mullahey, Mullahey Chevrolet & Kia; John Sackrison,
OCADA; John Patterson, OC Mazda.
Assemblyman Van Tran
Dealers came together at an OCADA Legislative Luncheon to meet with
their Assemblyman Van Tran.
Left to right: Jared Hardin, Hardin Hyundai; John Oh, Lexus of
Westminster; John Sackrison, OCADA; Jim Robins, Theodore Robins Ford;
Jon Gray, Orange Coast Jeep Chrysler Dodge; Assemblyman Van Tran;
Paul Lunsford, South Coast Toyota
f
100% o
ould
w
s
e
e
Attend
mend
m
o
c
e
r
tive
a
l
s
i
g
e
L
OCADA
ons to
e
h
c
n
Lu
lers!
a
e
D
r
othe
Visit us online!
www.ocada.org
SPRING 2010 11
National Champs
17 Years of Commitment to High School Automotive
Programs Brings Home National Championship
OCADA and Team from Loara High School ROP in Anaheim Take
First Place in Nationals!
F
or the past 17 years, OCADA has sponsored an automotive technology competition to recognize the
outstanding technical prowess of local high school
students and introduce them to the opportunities of a
career in automotive technology. Through this event those
opportunities are shared with thousands of high school
students, parents, teachers and school administrators.
Each year 12 students are paired with Orange County
Dealerships giving the students and the dealership a
12 OC Dealer WWW.OCADA.ORG
chance to take each other for a test drive. This year, for
the first time and with the support of Toyota of Orange,
an Orange County team from Loara High School ROP won
the National Championship.
The goa ls of OCA DA’s automot ive tech nolog y
competition are to showcase the talents of local students,
offer them one-on-one training and mentoring with
master technicians from area dealers, and to provide
them with scholarships to help them continue their
education. OCADA also sends the local winning
team to the national competition in New York, where
the students are exposed to more career and training
opportunities and the chance to win more than $100,000
in scholarships to the best automotive technology
schools in the nation.
At this year’s national competition, the Loara High
School ROP team, consisting of students Jonathan
Greenhalgh and Ben Hicks, instructor Russ Bacarella, and
Toyota of Orange master technician Gary Upton, were
pitted against 30 teams from across North America and
prevailed to become the first team from Orange County
to win the National Automotive Technology Competition
which was held April 6-7 at the New York International
Automobile Show.
This win, however, came only after five months of intense
training. In fact, master technician Upton invested more
than 100 hours to train and prepare the winning team for
both competitions. Toyota of Orange provided the vehicle
upon which to train and test their knowledge and problemsolving skills.
Rallying for the Champs
In what was akin to winning a NCAA championship,
Loara High School pulled out all the stops to celebrate the
team’s tremendous win. A school rally was held and attended
by more than 2,000 students and teachers, and dignitaries
from local congressional offices ,the Anaheim Union High
School District and the North Orange County ROP.
During the rally, representatives from the school district
and the ROP, as well as Toyota and OCADA, commended the
students and their instructor on their achievements.
“This outstanding team from Loara High School is
an illustration of how a student’s dedication and hard
work combined with an extremely passionate teacher can
culminate in tremendous success,” said John Sackrison,
executive director, Orange County Automobile Dealers
Association. “In addition to the scholarships they have won,
the competition affords them the opportunity to experience
firsthand the careers within a growing field with excellent
job security and economic opportunities.”
After the trophy presentation, the team received a
Congressional proclamation courtesy of Congresswomen
Sanchez, and a State Senate proclamation from State Senator
Correa. Toyota Motor Sales USA Technician Training
Supervisor Russ Casella presented a ceremonial key to a new
Toyota that the manufacturer will donate to the school’s auto
tech program, while Vikki Murphy of Wilson Automotive
Group and Toyota of Orange, presented the team with threeday passes to the Toyota Grand Prix in Long Beach.
After the rally, the students were quick to underscore the
importance of their win. Both were in awe of the reception
they received not only by the dignitaries in attendance, but
by their peers, who offered at least three standing ovations
during the event. They also embraced the opportunities
that lay ahead of them through the generous scholarships
that will enable them to continue their studies at the best
auto technology schools in the nation. Both have plans to
become master technicians, foremen and eventually join
the automotive world while completing their education
and training. n
SPRING 2010 13
What do your customers think and say
when your dealership name is
mentioned?
What first impression are employees
making with your customers?
How convenient is it for customers to
do business with your dealership?
When your desire to grow is
greater than your capabilities
...we can help.
Evaluation
Sales & Service
Assessments
Training
Job Specific
Skills
Loyalty
Net Promoter
Score
Managing Partners:
Stephen M. Harvey (949) 244-4712
[email protected]
Loren G. Phillips
(909) 477-7284
Improvement
[email protected]
Process
Shelly K. Jackley, C.P.A
14 OC Dealer WWW.OCADA.ORG
5319 University Drive #306 Irvine, CA 92612
www.idsconline.com
Redesign
Free Labor Law Hotline
Fisher & Phillips
as whether you have properly documented an
employee’s performance, whether you may lay
off an employee, or how to handle maternity
leave, etc. With this service, basic employment
law problems or concerns may be resolved in just
one phone call. n
Dealer Members can call the labor law
experts at Fisher & Phillips, Irvine, for free legal
assistance. Fisher & Phillips offer legal advisors
with experience representing dealerships in
labor and employment law matters, who can
provide answers to every day questions such
Call the
Free Labor Law Hotline
(949) 851-2424!
Please note that if Fisher & Phillips takes action at your request, they will notify you that these actions are billable.
SPRING 2010 15
Long-haul dealership commitment.
70 years and counting.
During tough times, what would you expect from a trusted partner? Professional commitment.
Innovative thinking. Personal service. That’s how Bank of America Merrill Lynch has earned the
respect of auto dealerships nationwide for the past 70 years. And it’s how we intend to earn
yours on the road ahead.
Put our time-tested industry experience to work for you. Contact one of our client managers
to learn more.
Stephen Bader
Tim Whitton
Robert Ludwig
1.949.831.6847
1.714.921.6402
1.714.491.6931
Retail Client Manager Retail Client Manager Sr. Client Manager
Joanne Toth
1.714.375.5939
Sr. Client Manager
Kelly Scarff
1.714.921.3405
Market Executive
“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed
globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment
banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both
registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value *
Are Not Bank Guaranteed. ©2009 Bank of America Corporation.
Get to know your legislator:
Congresswoman Loretta Sanchez
47th Congressional
District:
Anaheim, Garden Grove, Santa Ana
and Fullerton
Congressional
Committees:
Congresswoman Sanchez serves
as Vice Chair of the House Committee
on Homeland Security and is the
ranking female member on the House
Armed Services Committee. She is
also a member of the Joint Economic
Committee, a bicameral Congressional
Committee that examines matters
related to the U.S. economy.
A recognized leader on
national security, intelligence, and
counterterrorism issues, Rep. Sanchez
serves as the Vice Chair of the House
Homeland Security Committee and is a
member of the Subcommittees on Border,
Maritime, and Global Counterterrorism
and Emerging Threats, Cybersecurity,
and Science and Technology.
As a member of the Subcommittee
on Border, Maritime, and Globa l
Counter ter ror ism, Rep. Sa nchez
provides strict oversight for important
security measures, includ ing the
Transportation Worker Identification
Credential (TWIC) card program and
the Secure Border Initiative (SBI). Biography:
Rep. Sanchez is also the ranking
female member on the House Armed
Services Committee and is the Chair of the
Terrorism, Unconventional Threats and
Capabilities Subcommittee. As Chair
of Subcomm ittee, Rep. Sanchez’s
top priority is preparing our Armed
Forces for a new generation of security
challenges. This is a vitally important
subcommittee, with jurisdiction over
the Department of Defense’s counterterrorism and counter-proliferation
operations. The subcommittee also
oversees our military’s overall information
technology and cybersecurity - two
fields with direct implications for
Orange County’s growing technology
and cyber-defense sectors. Congresswoman Loretta
Sanchez began her congressional career
in November 1996 and is currently
serving her seventh term in the U.S.
House of Representatives.
Through her work on the Military
Personnel Subcommittee, Rep. Sanchez
advocates for service members, fighting
for pay raises, improved health care, child
Personal:
Born in Lynwood, CA. Currently
resides in Santa Ana.
Favorite Quote:
“ The ultimate measure of a man is not
where he stands in moments of comfort,
but where he stands at times of challenge
and controversy.”
– Martin Luther King, Jr.
care services, and housing and education
benefits for military families. She
also focuses on the issues of space
weaponization, missile defense, and
nuclear non-proliferation.
Sa n c h e z i s C o - Ch a i r o f t h e
Congressional Caucus on Vietnam and
a member of the Blue Dog Democrats,
the New Democratic Coalition, and
the Congressional Human Rights
Caucus. She wa s appoi nted by
Speaker Pelosi to serve on the Joint
Economic Committee (JEC), a bicameral
Congressional Committee composed
of ten members from each the Senate
and the House of Representatives.
The Committee’s main purpose is
to cont i nua l ly mon itor m at te r s
relating to the US economy, including
unemploy ment, foreclosures, and
interest rates. The Committee holds
hearings, performs research, and advises
other Members of Congress.
A product of public schools and Head
Start, Sanchez is a graduate of Chapman
University and American University’s
MBA program. Prior to serving in
Congress, she was a financial manager
at the Orange County Transportation
Authority, an assistant vice president at
Fieldman, Rollap and Associates, and an
associate at Booz, Allen, and Hamilton.
District Office Contact
Information:
ddress: 12397 Lewis Street, Suite 101
A
Garden Grove, CA 22840
Phone: (714) 621-0102
Email: [email protected]
Website: www.house.gov/sanchez
SPRING 2010 17
The “Opening Statements
to Negotiations Can Make
All the Difference”
By
Steve Richards
Most automotive customers approach the vehicle negotiations as they
would a fight. They are anxious, distrustful, a little bit afraid, and
definitely ready “to rumble!” This attitude does not exactly set up your
closings sequences for a collaborative atmosphere.
T
he purpose of a good opening statement is to establish a collaborative
atmosphere, increase the strength of
your position talking straight , creating
transparency, and clarifying the expectations for your prospect. Bring “out in
the open” the importance of the money
and drag some emotion into an otherwise logical situation; this will certainly
set you apart from the competition! Few
automotive sales consultants are taught
to do this, few sales consultants bring up
the money, and the primary reason is it’s
not taught. You have an opportunity to
create an environment that is much less
confrontational, more fun, and moves
much faster. You want to communicate
your intent to collaborate, while keeping
your control of the closing process high.
18 OC Dealer WWW.OCADA.ORG
You do not want this to sound insincere;
so practice your own opening statement.
Here is a breakdown
of a powerful opening
statement.
1. Part I – Talk straight, make the
transaction transparent, bring up
the importance of money, and lay
out the expectations.
a. “OK, we’ve worked hard to put
together this proposal in a fair and
simple manner. We know through
all of your time-consuming research
and exhaustive shopping you have
worked equally hard to find the
right vehicle at the right price. We
also know at this point it is all about
the money. However this is not a
perfect proposal. Our customers
have let us know what a perfect
proposal looks like! (Smile!) It has
us buying your vehicle for exactly
what you paid for it brand new and
we give you the new vehicle free!
(SMILE!) So while this proposal
is fair, it is not perfect. And we
understand that it is you who is
the judge and jury when it comes to
determining what constitutes fair.”
2.Part II – Remind the customer what
happens if this part of the sales process
fails, continuing your transparent and
straight talking path.
a. “Moreover, if we fail you, we
understand what happens. You get
up, go back out to the vehicle you
hoped you’d never drive again and
you leave. Most people do one of
two things; they leave frustrated,
go home, and complain about how
difficult car dealers make it to buy
a car. The problem is; the next day
the vehicle they wanted to sell is
still in their garage and they have
to start all over at another store.
Some people are so motivated and
energized that they leave here and
go straight to another store, meet a
whole new sales team, experience
another sales process and in about
3 – 4 hours they are in the same
position we are right now. If we
fail you, we too have to start all
over. We know our chances of
making you a member of our family
have been lost. Therefore, our
intention is NOT to fail you. We
are prepared to make this easy for
both of us, knowing that some small
disagreements may occur!”
3.Part III – Prior to showing the
offer to purchase to your prospect,
let them know, remind them if
you’ve already covered some of
the items, but reiterate the money
they save when they become a
customer. These benefits must be
“hard” benefits with dollar values
to be included. Adding a bunch of
light weight stuff just takes away
from the straight-talking nature
of this presentation.
a. “As a dealership we know saving
money is important to you. Most
dealerships will discount a vehicle,
but we have arranged to make
sure every day of your ownership
period is discounted. When you
join our family, both my dealership
and the factory join in giving hard
cash back in the form of goods
and services to you. Here is how!”
(List below all the MONETARY
benefits your store and your factory
provides the prospect when he
turns into a customer. Each should
have a story – your story.)
• We pay for the first detail, “When
you say “yes”, I’ll pick the phone and
call our detail department and have
them take your new vehicle, which
already looks good, to detail your
new vehicle, turning looking good to
great! We’ll spend $75 - $99 and we
don’t do this because we’re generous
or charitable; you know better.”
(SMILE!)
• We pay for the first tank of gas,
$40 - $60, “We buy your first tank of
gas, you will not leave without a full
tank of gas, for your vehicle we spend
about $XX.XX.”
• We pay for the 1st scheduled
maintenance, “We are so confident
in our service department’s ability to
impress you; we’ll pay for your first
scheduled maintenance which will
save you $30 - $35.”
• Svc. Discounts during ownership,
“As long as you own your new vehicle
and you remain in our market area we
will continue sending you discount
offers; they average about $300@year.
If you just used half of them you would
save about $600 during your first 4
years of ownership.”
• We keep your service records,
“Consumers are being coached to ask for
service records when buying pre-owned
cars these days. If a vehicle doesn’t have
service records the value is reduced by
the potential purchaser. Using our
service department for all your service
needs eliminate you having to worry
about producing the records. When
you choose to trade or sell your vehicle
we produce the service records for you
adding an additional $500-$1,000 to the
ending value of your vehicle.”
• We pay for a car wash with every
service, “Each time you have your
vehicle service with us, we pay to
wash your vehicle. Might not sound
like a lot, but if you have your vehicle
serviced 3 times a year we will have
paid for $180 in car washes during the
1st 4 years.”
•Comprehensive Warranty, “In a few
minutes you’ll see the investment
required to drive your new vehicle
home but what you won’t see for 36
months or 36,000 miles, whichever
comes first , is a repair bill. The
factory picks up the cost of repairs
during the time period.” (Make sure
you distinguish between warranty
repairs and items that wear out
and are not covered by the factory
warrant.)
• Power train Warranty, “You will not
see any large repair bills for 5 years
or 60,000 miles because the factory
covers repairs on your power train for
this time period.”
• Roadside Assista nce, “During
your first 3 years of ownership, or
36,000 miles, which occurs first,
your roadside assistance program is
completely paid for. This, as you will
discover if you buy your own roadside
assistance plan, is $70, a year, or $210
that stays in your pocket.”
• Loaner vehicle, tell the story that
applies to your store and/or your
factory and quantify it. For example
$50 a day, $35 a day, etc.
“So, as you can see, starting immediately
and for as long as you own your vehicle, we
pay you to be our customer. We start
paying you today and we never stop.
Please keep in mind, all the money coming
back your way, as you make your financial
decision.”
4.Part IV - The Summary of Vehicle
Benefits – Immediately prior to
presenting the offer-to-purchase
remind the prospective customer of
the vehicle you’re about to ask him
to pay for.
a. “Now the vehicle you picked out,
first choice of color equipped just
the way you wanted – what did you
like best about it during the test
drive?” (Encourage the prospect to
talk about the vehicle!) n
“Here is your
opportunity…” (Now
you unveil the numbers!)
Come see the next Steve Richards seminar “The
Objection Handling and Closing Formula”, June 2nd in
Costa Mesa. Call 949-428-5050 for details.
Welcomes Our New Associate Members
Tustin Community Bank
Tustin Community Bank, in business for almost 30 years, provides customized
financial products and services to meet the needs of the community. Founded in
1981 by former president John Prescott and a group of local business leaders,
offers tailored, solutions for businesses, professionals, and individuals.
Contact Gene Micco or Caroline Enciso at 714-730-5662
SPRING 2010 19
An Update from Capitol Hill
By
I
always see a lot of people when I’m
home in Orange County, whether it’s
at some formal speaking engagement,
at a party, or it may just be someone who
comes up to me while I’m filling up at
a gas station or getting a cup of coffee.
No matter if they are Republican, Democratic, or Independent the question
always seems to lead to the same place:
What can I do?
So, what CAN you do? Lots
of things:
Raise your voice: write a letter
to the editor of your local newspaper or
call a talk radio show. These are effective
methods to communicate your voice to
a wide and diverse audience, and could
provide much needed information to
those who only receive their news from
the mainstream media.
How to get a ‘Letter to the
Editor’ published:
• Keep it short. Length and format
requirements will vary but most
newspapers have word limits for
submissions.
• Stay on topic. Make one point (or
at most two) in your letter. State
the point clearly, ideally in the first
sentence. Think local. The smaller
the newspaper’s circulation, the easier
it is to get your letter printed.
• Use short punchy sentences. This will
make it easier for the reader to follow
your thinking.
20 OC Dealer WWW.OCADA.ORG
Congressman John Campbell
Get Involved in the
Political Process
• It’s ok if you don’t get published. If
media outlets get letters from a dozen
people raising the same issue, they
will most likely publish one or two
of them.
Know Your Candidates:
Take the time to get to know who is
running for office in your area and be sure
to let your community know who you
support. You can research candidates
either at the Orange County Registrar
of Voters (www.ocvote.com) or the CA
Secretary of State Office (www.sos.ca.gov).
You can also see who I am supporting at
www.CampbellforCongress.com.
Once you have found candidates
you wish to support, engage in their
campaign. Put a yard sign in your
lawn; make phone calls on behalf
of the candidate; knock on doors in
your neighborhood; make a financial
contribution and attend fundraisers for
your candidates.
Social Networking: Web
sites like Facebook and Twitter are
where more and more Americans get
their news and keep up with issues.
By simply sharing your information
and opinions with your friends, you’re
channeling the energy that’s building
in America for a return to responsible
and responsive government. Be sure
to connect on a social networking site,
post comments on blogs and online
newspapers and electronically forward
information to people you know at work,
a club you belong to or your church or
synagogue.
Vote!: Voting in any type of election,
from local elections to Presidential
primaries, provides an important way
to voice your opinions regarding elected
leaders and overall policies; voting also
helps you decide your own future by
electing a person who might reflect your
own views. The ability to vote exists as
one of the most cherished Constitutional
Rights that many fought for, marched for,
and died for over the centuries.
Make sure to register or re-register
friends, neighbors and colleagues to
vote. And on Election Day, bring another
registered voter down to the voting polls
with you. If every voter brought just ONE
additional voter with them, the outcome
of an election could drastically change!
In politics, the side with the better
ideas does not always win. The winner
is the side with the greater number of
active and effective participants - those
who choose to be involved.
Choose to be involved because your
country needs your help. n
I Remain Respectfully,
Congressman John Campbell
Health Care Reform
– Immediate Impact
by
Marina Nordby, Account Executive, Burnham Benefits Insurance Services
The highly discussed Health Care Reform became the law
of the land on March 23rd of 2010 and shortly was followed
by an overwhelming number of articles summarizing its
key provisions. However detailed, few of them succeed in
addressing the dealers’ main question: “How will this effect
me, my dealership and my employees?”
T
he immediate impact of Health
Care Reform on employer spons or e d he a lt h pl a n s r evolve s
around three provisions: the coverage
for children under age of 26 regardless
of their student status, coverage for
preventive services without cost sharing (no co-pays or deductible), and
elimination of lifetime maximums.
Each of these provisions takes effect
at the renewal following September
23, 2010 (though insurance carriers
are still working out the exact dates
of the changes).
Most dealerships offer coverage for
dependent children up to age 19 and up
to age 25, if they are fulltime students.
The estimated rate impact of covering
dependents up to age 26 is roughly 1.5 to 2
percent in additional premium. In many
cases this additional enrollment will
not generate extra premium (especially
in the case of family coverage), but will
expose the group plan to more claims.
The other t wo prov isions a re
associated with plan design. In Southern
California, HMOs are the most prevalent
medical plans that are offered at a group
level. The rate implication should be
minimal, as these plans already have no
lifetime maximums and the majority of
them have minimal cost sharing, if any,
for preventive services. For example,
preventive services for adults typically
are covered at a co-pay, while preventive
services for kids are covered at 100%,
with no co-pay. PPO plans, often offered
as a buy up option, will see a greater
impact on rates due to the benefit
changes. If the plan covers preventive
services at some level of cost sharing,
the possible elimination of these co-pays,
deductible, and coinsurance may amount
to an additional 1 to 3 percent increase
in premium. In terms of eliminating life
time maximum (currently $5,000,000
- $6,000,000 on the majority of the
plans) the cost impact is perhaps only
an additional one tenth to one half of a
percent as very few people actually hit
that maximum.
Another Health Care Reform change
that will not be as immediate is the
disclosure requirements pertaining to
premium increases. The impact on your
dealership will depend on what increases
will be passed along to the employees.
If the dealership picks them up, there
are no communication requirements. If
the increase, even partially, is passed to
the employees with or without benefit
changes, the plan is required to notify the
participants 60 days prior to the effective
date of the change. This presents an
immediate challenge for employers where
the decisions on the plan design and
employee / employer contributions are
being made much closer to the renewal
or effective date of change. It is possible
that some dealerships will be forced to
accept the less favorable renewal due to
time limitations.
Through 2011 - 2013 the employers
will have to adopt the mandatory
changes in benefit designs, as well as
IRS and other government agencies’
HEALTH CARE REFORM
– continued on page 22
SPRING 2010 21
HEALTH CARE REFORM
– continued from page 21
reporting requirements. In 2014 major
provisions of the reform will take place.
Here are some of the highlights:
The first is the “automatic enrollment”
provision will require employer groups
of 200 or greater to enroll all employees
eligible for coverage in the offered health
plan with the option to opt out. This will
increase cost due to higher enrollment.
For the dealer industry with its high
employee turnover this also can create
a problem of high COBRA population.
Statistically a COBRA participant can
costs the plan 150% to 200% more in
claims than an average active participant.
Secondly, the legislation mandates
the eligibility waiting period not to
exceed 90 days. A lot of dealerships
already have this provision in place. For
those that have longer waiting periods
due to the high employee turnover, this
will create the same COBRA issue as
the automatic enrollment. In addition,
it is not clear at this time if the coverage
will have to be offered immediately
upon satisfaction of 90 days waiting
period or on the 1st of the following
month. Depending on the regulations,
the provision will create additional
administrative issues.
The last mandate is the definition of
full-time employees used for calculation
of “play-or-pay” penalties. Health care
reform currently defines full time
employee as an individual working at
least 30 hours per week. The average
dealership definition of a full time
employee is 35-40 hours per week,
which means that in 2014 the number
of employees eligible for benefits at each
store could increase, driving the cost up.
It is clear that through these uncertain
times and new highly regulated health
insurance landscape it is important that
you select the right broker/consultant
partner to assist you. There are a lot of
22 OC Dealer WWW.OCADA.ORG
tools we have not reviewed in this article
to help mitigate any financial impact of
these changes, and your health insurance
broker/consultant should be working
with you to explore these alternatives.
This article is a very brief overview
of the major components of Health Care
Reform as currently passed. The bill itself
is massive and contains many additional
provisions that will have a major impact
on the health insurance marketplace,
including the individual marketplace and
insurance underwriting requirements.
The goal of this brief article was to call
your attention to the parts of the law
that will affect you as an employer in the
nearest future.
As more information becomes available,
Burnham Benefits Insurance Services will
be providing more information in future
editions of the OC Dealer. If you have further
questions, please contact Marina Nordby
at (949) 252-4588 or email her at nordby@
burnhambenefits.com. n
Insurance
Risk Management
Call
800-435-8842
Darin Haag
Regional Sales Manager
We can help you get covered.
Louis Pingtella
General Manager
Zurich HelpPoint is here when you need more than just insurance.
For more than 85 years, Zurich has remained committed to developing
innovative solutions that provide the coverage your company needs
and peace of mind you deserve. With the stable financial position of
Zurich in North America*, our insurance products – such as Unicover®,
one of the most extensive lines of automotive business coverage
available – are frequently recognized by national automotive organizations
and associations. And so is our reputation for delivering when it matters,
with one-day response times to all claims inquiries and onsite assistance
for most major losses within 48 hours. This all helps explain why 80 percent
of our customers renewed their automotive insurance policies in 2008.
Visit www.zurichna.com/zdu to see how we can help you.
Here to help your world.
Insurance coverages and non-insurance products and services are underwritten and provided by member companies of Zurich in North America, including Universal Underwriters Insurance Company and Universal Underwriters Service Corporation.
Certain coverages, products and services are not available in all states. *For information about the ratings and financial information of Zurich American Insurance Company, access the ratings section on www.zurichna.com.
© 2010 Zurich American Insurance Company
10-0446 Corvette ad for OCADA.in1 1
2/5/10 7:36:08 AM
Orange County Automobile Dealers Association
3737 Birch St., Suite 220
PRSRT STD
U.S. POSTAGE
PAID
SALT LAKE CITY, UT
PERMIT NO. 508
Newport Beach, CA 92660
This magazine is designed and published by Media Communications Group | 1.888.745.4003