1st Quarter 2018, Volume 60, Issue 1PAGE 6Meet Your 2018 PresidentPAGE 16Tax Reform Opportunities & Challenges for DealershipsImportant Legislative Luncheons to Discuss AB2107:Protect the Franchise SystemTHE OFFICIAL PUBLICATION OF THE ORANGE COUNTY AUTOMOBILE DEALERS ASSOCIATIONPAGE 10Serving the Dealer Industry for Over 35 YearsAttorneys at Ferruzzo & Ferruzzo, LLP have represented new vehicle dealerships, collectively for over 160years - auto dealership related! Buy-Sell Agreements: Tom Ferruzzo - 35 years, Jim Barone - 31 years, Litigation: Jim Ferruzzo - 35 years, Greg Ferruzzo - 23 years, Succession Planning: Jim Leese - 22 years auto, 37 years total, Real Estate Transactions: Gordon Scholte - 16 years auto, 35 years total.Transactions for DealershipsA Limited Liability Partnership, including Professional Corporations 949.608.6900 | Negotiating and Drafting Buy-Sell Agreements Estate Planning for Dealers Negotiation of Computer Software, & Hardware agreements Negotiating Capital Loan and Lender Agreements Real Estate Acquisitions and Financing Relocations Negotiation of Executive Compensation Negotiating Government Loans and Incentive Agreements Agreements and Buy-Ins Dealings with ManufacturersLitigation Support Protests before the New Motor Vehicle Board Litigation in all State and Federal Courts Customer Dispute Resolution including lemon law claims Represented Dealerships in seven of the Arbitrations in Hearings Before DMV, AQMD, RWQC, OSHA, California regarding the GM BankruptcyBUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICESOC DEALER is a Publication of the Orange County Automobile Dealers Association3737 Birch St., Suite 220 • Newport Beach, CA 92660Phone: 949-428-5050 • Fax: 949-428-5054CONTENTS6 President’s Message10 Legislative Luncheons: Meet the Elected Officals Who Establish Franchise Protection Laws11 AB 2107: Protecting the Franchise System13 OC Delegation to Dealer Day15 Get To Know Your Legislator: Senator Janet Nguyen16 Tax Reform Opportunities and Challenges for Dealerships19 NEED TECHS? Meet OC’S Auto Tech Students: Spring College Events20 Ask Alison: DOL Audits On The Rise…Again22 Margin Programs Morph Into Dealer Agreements But Now On a Two Way Street24 OCADA Annual Golf Tournament25 Meet Your NADA Leadership Team: Paul D. Metrey26 When Something Smells Phishy: Steering Clear Of Fraud27 Reduce Your Exposure, Reduce Your Expenses: Free Employment Law Hotline28 Discount Your Inventory, But Not Your F&I Process29 New Auto Recall Tool Allows Free Batch Searches For Dealers30 OCADA Celebrates 25th Anniversary Of Automotive Technology Competition31 Welcome To Our New Associate MembersCALENDAROF EVENTSBOARD OF DIRECTORS PRESIDENT Ben BonfoeyNorm Reeves Acura Mission ViejoVICE PRESIDENTDavid SimpsonSimpson Buick GMCSimpson Chevrolet of Garden GroveSimpson Chevrolet of IrvineTREASURERScott WadeDavid Wilson’s Villa FordAUTO SHOW CHAIRMANK.C. HeidlerTom’s Truck CenterDIRECTORSMiles BrandonCapistrano VolkswagenCapistrano MazdaJared HardinHardin Buick GMCBrad MuggNorm Reeves Honda Superstore IrvineFrank MurphyMiller Toyota of AnaheimJohn OhLexus of WestminsterEXECUTIVEDIRECTOR/SECRETARYJohn SackrisonINTERESTING OC AUTO FACT185,107 new vehicles were sold in Orange County in 20174April 5, 2018 OCADA Super Session Workshop Used Vehicle Management Presented by Dale Pollak National University, Costa MesaMay 16, 2018 CNCDA Dealer Day SacramentoJune 4, 2018 OCADA Golf Tournament Mission Viejo Country Club©2018 Orange County Automobile Dealers Associatiion. All rights reserved. OCDealer is published four times each year by OCADA and is the official publication for the association. The information contained in this publication is intended to provide general information for review and consideration. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the OCADA, its board of directors, or employees. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. OCDealer is a collective work and as such, some articles are submitted by authors that are independent of OCADA. While OCDealer encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission from OCADA. For further information, please contact OCADA.6Q: Did you always aspire to be part of the automotive industry?A: I grew up in the automotive industry. Since I was in high school I took auto classes and was set on becoming a technician. My senior year of high school I started selling cars full time as an elective class my last semester. I planned to continue after the semester ended through the summer until I left for school in September. At the end of the summer I enjoyed selling so much I said I am going to try this for another year and then I can go back to school. I never made it to school and have been in the automotive industry ever since. Q: Have you always lived in California?A: I grew up in Cedar Rapids, Iowa until I was 13 when my parents received jobs in the bay area. It was tough leaving our family and friends but we were excited to move to California. I lived in Pleasanton, California until I graduated, then in Livermore until I moved to southern California in 2011. Q: What’s the most rewarding part of your career?A: I take pride in watching the people we train grow through the ranks and in their careers. I also enjoy working with our team to solve problems and create solutions to improve our staff and customers’ experiences.Q: Are there any individuals that have inspired you over the years?A: I have had a few individuals that have inspired me over the years. The first that comes to mind was a GM I worked for, Bill who pushed me extremely hard and over the next few years of working for him, I quickly grew through the ranks. I learned from him to understand every part of my job responsibilities, always be prepared and to always want to learn more. I learned to never say that’s not my responsibility and to use every opportunity to learn every aspect of the business. The next individual that comes to mind is Joe, another GM I worked for who really taught me how to motivate and inspire people. He was extremely humble and he allowed the solutions to problems to come from everyone in the organization, not just upper management. He was a fantastic leader who you always wanted to get behind and people worked harder just for him. Q: What challenges have you faced?A: In 2008 like many of us I had some challenges, the dealership I worked at was being sold and the current franchise I was with was being given back. I had to take a few steps back and take a lower position, but in hindsight it was one of the best things to happen to me because it exposed me to a new brand, with higher volume and it pushed me harder. Q: Where do you think the auto industry is headed in the short term and the long term?A: I think the automotive business is always going to need brick and mortar - I just don’t think that can go away. I do think there will be opportunities where consumers may want to pay for convenience to have the vehicles delivered and complete the transaction at home. President’sMessageBen BonfoeyNorm Reeves Acura of Mission Viejodealerships877.DLR.CPAS | dealerships@dhgllp.comAssurance | Tax | Advisory | 2,500+Dealership Clients Served160+Dedicated Dealerships Professionals50States with Dealership Clients6Of the Top 10 Dealership Groups are DHG ClientsDRIVING RELATIONSHIPS FORWARDWe leverage our knowledge of and relationships within the industry to help identify solutions surrounding dealership trends and hot issues, which include:Mergers & AcquisitionsSuccession PlanningFacilities & Factory MattersRisk & RegulatoryPerformancePeople & Talent AcquisitionPresident’s Message (cont.)Q: What keeps you involved in OCADA? What inspired you to serve as a leader in the Association?A: I was nominated by one of our fellow dealers which was news to me until I received a call from John Sackrison. After serving on the board for a year when elections came up I raised my hand for a Treasurer position. After seeing all of the changes potentially coming to our industry I wanted to stay involved. It’s great being involved and seeing a difference being made like the technician recruitment program where over 40 technicians have started working in Orange County stores. Q: What will OCADA do to continue uniting dealers and strengthening the voice of the industry in the coming months?A: OCADA is committed to working with our state association CNCDA to help influence our legislators on bills that impact our business. OCADA is especially committed this year to help get AB2107, the franchise bill passed. Q: What do you think makes OCADA membership invaluable?A: OCADA and the team there are committed to making the dealers’ voice heard with our legislators. Q: Describe your all-time favorite ride and what are you driving today?A: My all-time favorite ride today is the 2017 Acura NSX in Nouvelle blue. Today I am driving a 2018 Acura MDX Advance.Q: Tell us about your family.A: I have a beautiful wife Lisa who I have been with for 10 years. Lisa and I have an 8 month old son name Benson. Q: What’s your favorite way to spend your free time?A: In my free time I enjoy playing golf although with our new addition to the family I have only played a few times in the last year. In the rest of my free time I enjoy spending with my wife and son. Orange County (714) 672-0022Sacramento (714) 672-0022Focusedon YOUFocused on your:• Accounting• Taxes• Audit• Review• Bookkeeping• Internal procedures• Cash flow• Consulting servicesDonald Slater, CPA Automotive Services Partner donald.slater@lslcpas.comMike Mangold, CPA Automotive Services Partner mike.mangold@lslcpas.comDavid Myers, CPA Automotive Tax Partnerdave.myers@lslcpas.comPut our experience to work for you.Since the 1940’s we have provided a complete range of services to the owners of dealerships and other automotive related businesses.Political crisisin South AfricaPresident JacobZuma,his tenure tainted bycorruption scandals, isgivegivegi ntwo options by hisparty, theAfrican Na-tional Congress: Resignwithin 48 hoursorfacerfacerfdismissal. WORLD,A3WeatherPartlycloudyand cool.Rain is possible.L.A Basin: 64/4964/4964/ . 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Atthis rate, by Feb.19,L.A. is ontrack to havehahaafullafafyear withCaliCalifofornia isdry, hot anddesperatefatefat oreforefprprecipitationUnlikelast winter,this year’slack of rainand paltrysnowfallhavehaveha of By Paige St. Rong-Gong and Sarah They stroll through Dis-neyland in packsof20ormore, motley crewsthat re-semble across between theHells Angels motorcyclegang and agrown-upMickeyMouse Clubwith their Dis-ney-themed tattoos andtheir matching denim vestsstrewnwith trading pins andlogos.loglogDisneyland social clubs,by most accounts, areharm-less alliances of friends andfamily whomeetupattheparktparpar osharea nerdy obses-sion for all thingsDisney.With clubnames suchasTiggerArmyand NeverlandMermaids, howthreateningcan they be?“It’s all about the sharedloloveve forfor DisDisneyney,”,”neyneyneyney saisaidMdMararkDrop Jr., 39,who founded aaclubcalled Flynn’s Riders,afteafaf racharacterinthe WaltDisney animatedfilmdfdf“Tan-gled.”But acivillawsuit filed inOrangeCountySuperioruperiorCourthas revealed adarkkundercurrent to the pas-time. 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Fallon ForThe TimesAbAbitterfeurfeurf dbetweenDisneyland social clubsSuperfans’rfrfsuit allegesegeg agangster-likes-lik-lik hakedownhakhakBy Hugo Martin[S[Seeee DisneyDisneyland,land, A8]A8]AT CALIFORNIAAdventure, Nathan Andersonshoshowsws atatatattootoo ofof WaWaltlt DisneyDisney andand MickMickeyey Mouse.Mouse.and collaboratively legisla-ting.Notinseveral years hasthere beena freewheelingelingprocesstodraftaraftarafnd vote onimportant legislation. In theincreasinglypartisan cli-mate, bills aretypicallyypicallycraftecraftecraf dbehinddoors and ei-ther accepted or rejectrejectreed, asseen in the GOP’s recenttax-cut plan or the ill-fatedattempts to repeal Oba-macare.But thatisnot what is ex-pected —atleast not so farfar—when the Senatetries tostrikeacompromise to pro-tect young “Dreamers” fromdeportation while beefingingefingefof finding aworkable solu-tion,” McConnell said Mon-day.“Ihope thisbody canseize this opportunityanddeliver real progress.”Hanging in the balancearethe livelihoodsofnearlyearly700,000 young immigrantswhowho havehavehabeen in the coun-tryillegallysince childhood.President Trump is endingendingthe Obama-era DeferredAc-tion for ChildhoodArrivalsprogram,whichofferedthem temporarypermits toliveand work in the U.S.McConnell waspres-[S[Seeee ImmigrImmigratation,ion, A6]A6]2018 OLYMPICSLAS LaPrairie morning windswinds sleeping waway. 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NANATION,TION,NATION,NANATION,NAA5A5ThequestionstumpedJohnDaly.Daly.DalyAmid the usual first-datecon-versation at a Wasa Wasa W hington restau-rant 15 monthsago,the womanhemet online asked what he waspas-sionateabout.Daly didn’t havehavehaan answer.Ner.Ner othing in hislife matched the rush from plunging headfirstdfirstdfdownhill at morethan80mph in the skeleton.AndAnd nothing in his life matched the heart-break he experienced from one of the mostdangdangererdangerdangdangerdang ousous sporsportsts in thethe WiWintnterer OlympOlympics.ics.“It waspart of my past,” Daly said. “IthoughtIwas going to leaveleavelea it there.”But the innocent questiontriggeredhisreturn to the sport he had walked away fromomand started the long journey to thePyeongchang Games.Daly is known for using the #PerfectHairrhashtag on socialmediatotout his hair —whichheonce jokedis“windproof,hoof,hoof elmet-proof and bulletproof”—and making come-dic videos.“He’slikea big,mischievous child whowill makeyou laugh as hardashemakes youworry,” said Jesse Lichtenberg, Daly’sagagententagentagagentag..ADATADATAD EWITH FATEFATEFAJohn Daly thoughthewas done with skeleton,but a woman’soman’soman question rekindledhis passion[S[Seeee DalDaly,y, A9]A9]By Nathan Fennoreporting from pyeongchang, south koreaandandand Saencencencingyeyear onAndremainsmainsprecedentcococonditions,stormday..daydaydaydaydayFeFebrwewetmAndAnd theoffersoffoff“Ifstockockocks,tologisttiallytiallytially,ttiallytiallytiallytiallytiallytiallytiallytiallytiallytiallytiallyMontecitjojojojojorstolast12mraining2017,ahasn’tbsince.”since.”Southerndesperaweweek’sppectedperperperts aran act“Wseesomecipitationnot appearwiwill brsprsprsprspreadeadTheyThey strolloll thrthrthrough Dis-neylandand in packsof20orrmore, motley crewsthat re-sembsembsemblelele acacrororossss betbetbetweweweenen thethetheHells Angels motorcycycyclegang andandand agrown-upMpMpMickeyeyMouseuse Clubwbwbwithith their Dis-ney-themedthemed tattattattototoosos andandandtheirtheirtheir matcmatcmatching denimdenimdenim vevevestsstsstsstrewewewnwnwith trading pins andlogloglogloglogos.os.os.loglogloglogloglogDisneyland sosocicialal cluclubs,bs,bs,by most acaccounts,unts,unts, ararareheharm-less alliances ofofof friends andandandfamifamily whwhomomomeeeeeetututupapattttttheheparktparpar osharea nerdydydy obses-sionsionsion for allallall thingthingthingsDisney.WiWiWith cluclubnamames sucsuchasTiggerArmyandndnd NeNeveverlandrlandMermaidrmaids, howtwthreateningcancan they be?“It“It“It’s allallall aboutaboutabout thethethe sharsharsharededloloveveveveve forfor DisDisneyney,”,”,”neyneyneyneyneyneyneyneyneyneyneyney saisaidMdMdMdMararkDrop JrJr.,., 393939,w,w,who founded aaaclucluclubcbcbcalledalledalled Flynn’s RiderRiders,s,afteafaf racharacharacterinthehe WaWaltDisney animaanimatedfilmdfdf“Tan---gled.”ButBut acacacivillawsuitsuit filedledled inOrangeCeCouountntySuperioruperioruperiorCourthasas revealedaled adadarkkunderundercucucurrrrrrent toto the pas-pas-time.time.time. 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TheTheThe plot revorevolvlvlvesesesarounoundthe Main StreeeetFireStation 5555 Social Club,b,b,whose leaders claim thetheyyhahavehaha bebeen bulliebullied ad ad andnd terror-izedized by thethethe head of the WhWhiteRabbitbitsSocialocial Club.The lalawsuitwsuitlalalanamesnames 19Disneyland social clubsSuperfans’rfrfrfrfrfrfrfrfrfrfrfrfrfsuit allallallegegesesegeg agagangstangster-likes-lik-lik hakedownedownhakhakBy Hugogo Martrtinin[S[S[S[Seeeeeeee DisneyDisneyland,land, A8]A8]A8]AT CACALIFORNIAAdventure,nture,nture, Nathan Andersonshoshoshoshoshoshoshoshowswswswswswswswswswsws atatatattootootootoo ofof WaWaWaltlt DisneyDisney andand MickMickeyey Mouse.Mouse.202020181818 OLYMPIPIPICSCSCSPYPYPYEONGReach OrangeCounty auto buyers where they live with the Los Angeles Times and Times OC in print and online.Advertise now! Call Carrie Brown at 213-237-5391Next >