Dear Dealer Member:
The Colorado Automobile Dealers Association’s 2015 “Project DC” is preparing for takeoff. Your CADA Board of Directors, some of our NextGen dealers, their guests and staff will be taking our September CADA board meeting on the road to Washington, D.C. from Sept. 27 to Oct. 1 so we can meet with our Congressional delegation and attend the annual NADA Washington Conference. I admit that it won’t be all work and no play… the staff has some exciting and interesting tours planned for us, as well.
This is the third year for CADA Project DC. It grows in value for us every year because we become better acquainted and build more effective relationships with our lawmakers and advocate strongly and face-to-face for dealers and our industry. CADA Project DC also a good initiation for our NextGen dealers into the crucial role dealers must assume in the political process. Rolling the trip into the NADA Washington Conference makes a lot of sense, too. So even though the trip comes at a very busy time of the month for new car dealers, it’s worth the time to pursue these objectives.
After a day spent visiting some of Washington’s sights, our official agenda kicks off Monday evening with a reception for dealers and VIPs.
Tuesday’s agenda calls for the September CADA Board of Directors meeting in the morning and participating in the NADA Washington Conference in the afternoon. We’ll attend the NADA Delegates’ Welcome Reception and then break away to have our own reception and Colorado State Senate GOP fundraiser. Later we’ll host Colorado’s Republican Congressional delegation for dinner.
Wednesday we’ll return to the NADA Washington Conference in the morning. In the afternoon Board members and NextGen dealers will pay office visits to our elected federal lawmakers. The final Washington Conference reception is that evening and we’ll finish out the day hosting our Colorado Democratic Congressional delegation at dinner.
I’m anticipating that we’ll hear some interesting perspectives on important industry issues during the NADA Washington Conference. Among the scheduled speakers are Sen. Rand Paul (R-KY), Rep. Frank Guinta (R-NH), Rep. Tulsi Gabbard (D-HI) – the NextGen speaker, and FTC Commissioner Maureen Ohlhausen.
Conference topics include NADA’s three immediate legislative priorities, which affect all of us as dealers:
The Consumer Financial Protection Bureau Reform Bill: “Reforming CFPB Indirect Auto Financing Guidance Act,” H.R. 1737. This legislation – introduced by Colorado Democrat Rep. Ed Perlmutter and New Hampshire Republican Rep. Frank Guinta – would rescind a 2013 CFPB guidance that would eliminate our flexibility to discount auto loans in the showroom. The CFPB wants to change the $907 billion auto-loan market and limit competition without providing any opportunity for public comment or fully analyzing what the impact of implementing the guidance would be on consumers.
Recall amendments to the Transportation Bill, H.R. 22. Sen. Claire McCaskill added a provision to the House-passed bill that would prohibit “rental car companies,” including most automobile dealerships, from renting (or in our case, loaning) automobiles under open recalls, even when the recalls do not involve any safety issues. NADA correctly points out that the provision is flawed because it fails “to differentiate between recalls that involve a defect that should be immediately addressed and those with a negligible impact on safety, such as an incorrect phone number in the owner’s manual or an airbag warning sticker that might peel off the sun visor.” NADA is urging Congress to focus just on “recall provisions that measurably benefit safety, and oppose overbroad legislation that raises costs for consumers and small businesses without a commensurate safety benefit.” In other words, don’t approve Sen. McCaskill’s provision, or include similar language in any new transportation bill.
Changing LIFO and advertising deductibility in ways that would hurt small businesses – Tax reform proposals put forth in the last Congress would repeal LIFO (Last In-First Out) and significantly restrict advertising deductions. LIFO has been used as an inventory accounting method because it helps keep costs down, while advertising has been considered an ordinary business expense when figuring taxes for more than a century. Changing either or both of these would restrict our working capital and could impact jobs.
We’ll be speaking with our Congressional delegation about the impact of these, and other legislative and regulatory issues, when we meet with them during CADA Project DC. We’ll be conveying the important message that dealership employment is the highest of any sector of the automobile business in the U.S.; nationwide dealership payrolls contributed more than $58 billion to the economy and the average employee paycheck was more than $55,000 per year. In other words, our employees are important members of America’s middle class.
With recalls so much in the news over the past year, we’ll also be reminding lawmakers that the combined recall and warranty work American new car dealers performed last year amounted to $8.5 billion, and was done at zero cost to consumers.
In the words of 2015 NADA Chairman Bill Fox, “the retail-automobile industry is a pillar of the nation’s economy, and the dealer-franchise network remains the best, most competitive and most cost-efficient way to distribute and sell new cars.”
It’s an important message – certainly worth our Directors’ spending time in Washington, D.C., our nation’s capital, to articulate and reinforce it with our lawmakers. Many thanks to our CADA staff for the work they’ve done to set up the trip. I know it will be an exciting and worthwhile visit.
2015 CADA Chairman