Stacey Gillman Wimbish Stacey Gillman Wimbish - Media ...

ARE YOU READY FORTAX SEASON SALES?ShipCarsNow can help you transport thebest inventory from anywhere in the USA.SAFE, RELIABLE, AFFORDABLE,AND EASY AUTO TRANSPORT.FOR ALIMITED TIMESAVE 15%on Auto Transportwith Promo CodeAATAX1201VISIT shipcarsnow.comOR CALL 866-207-3360A Union Pacific CompanySave 15% on your next shipment. (Valid for orders placed before April 30, 2012).Visit website for promotion terms and conditions.

2012 TADA LEADERSHIPJohn ZwiacherChairman-ElectStacey Gillman WimbishChairman2012 TADA EXECUTIVE COMMITTEEStephen CavenderImmediate Past Chairman Rick Cavender Southwest Mark Daniels Northeast Milton S. Greeson, Jr. South Larry Hall West Bryan Hardeman Central Craig W. Kinsel East Mike Smith Southeast David Schoemaker North Joe Street NorthwestBrian BrucknerTexas Truck Dealers ChairmanBill WoltersPresidentKaren PhillipsExecutive Vice PresidentGeneral Counsel2012 SPRING 7

From global resourcesthrough local insight into the Texas market.Opportunity at every step. Take advantage of world class solutions and unwavering support from a client manager who’scommitted to understanding your evolving needs. Working hand in hand to provide you with deepindustry expertise and a full range of customized solutions to help you succeed.Mike WeidnerMarket Executivemike.weidner@baml.com1.281.246.1081“ 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 globallyby banking affi liates 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 affi liates ofBank of America Corporation (“Investment Banking Affi liates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered brokerdealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affi liates: Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed.©2011 Bank of America Corporation.

2012 TADA BOARD OF DIRECTORSApril AnciraSouthwestDistrict 26Daniel BradleyNorthwestDistrict 31David L. BrinsonEastDistrict 7Brent BrownNorthwestDistrict 28Donnie BuckalewSoutheastDistrict 33Bryan CaseEastDistrict 4Joe ChastangAt-LargeKimberly DanleyCentralDistrict 12Mike DunnahooWestDistrict 25Tom DurantAt-LargeCharlie GilchristNorthDistrict 22Sean F. GunnSouthwestDistrict 24Nancy HarperCentralDistrict 14Randy HileyNortheastDistrict 35Jon HillSouthwestDistrict 19Paul S. KaneSouthwestDistrict 21Bill KliewerCentralDistrict 13Tim LightCentralDistrict 11Marvin MarcellSoutheastDistrict 15Charles MartinNortheastDistrict 8Erik MaundAt-LargeRobin T. MercerEastDistrict 3David MossySoutheastDistrict 6Dennis R. NeessenWestDistrict 32Phillip NeessenSouthDistrict 20Tony PackNorthDistrict 10Harry PattersonNorthDistrict 23Doss RogersWestDistrict 29John S. RoleyNorthwestDistrict 30W.M. “Rusty” RushAt-LargeJoe W. Sandlin Jr.NortheastDistrict 1Craig SiskEastDistrict 2Roland F. SmithSouthDistrict 27W.C. Smith IIISoutheastDistrict 5Jim SnellNorthDistrict 34Bob TomesNortheastDistrict 9Cliff Weber IIISouthDistrict 18Cary T. WilsonSouthDistrict 17Scott T. WilsonWestDistrict 1610

2012 SPRING 11

TADA Regions and Districts CENTRAL REGION • Vice Chairman Bryan Hardeman, AustinDirector, District #11Tim Light, Bryan 1-01-12 12-31-14Area DirectorsJohn Allen, College StationDon Hewlett, GeorgetownDon Ross Hewlett, GeorgetownAllan G. Miller, RockdaleDirector, District #12Kimberly Danley, Cleburne 1-01-11 12-31-13Area DirectorsDan Danley, CleburneWayne Gloff, CliftonVan Griffith, GranburyKen Nichols, CleburneDirector, District #13Bill Kliewer, Killeen 1-01-11 12-31-13Area DirectorsHarry Adams, Temple Jerry Miller, WacoRichard Karr, Waco Donnie Ringler, TempleJohn W. Kliewer, KileenDirector, District #14Nancy Harper, Austin 1-01-11 12-31-13Area DirectorsJames Bagan, Austin Will Harper, AustinBrad Elliott, Austin Bill Henline, AustinT Harper, Austin Chris Late, AustinDirector At-LargeErik Maund, Austin 1-01-11 12-31-13 EAST REGION • Vice Chairman Craig W. Kinsel, BeaumontDirector, District #2Craig Sisk, Longview 1-01-12 12-31-14Area DirectorJohn W. Cooke II, CarthageDirector, District #3Robin T. Mercer, Lufkin 1-01-10 12-31-12Area DirectorsBrian Bounds, LivingstonDan H. Fussell, San AugustineRoger C. Mercer, LufkinDirector, District #4Bryan Case, Beaumont 1-01-12 12-31-13Area DirectorsRobert E. Allison, Jr., JasperBill Brackin, LibertyDrew Donalson, SilsbeeDirector, District #7David L. Brinson, Athens 1-01-11 12-31-13Area DirectorsAlex Harrill, MabankWylie Musser, Terrell NORTH REGION • Vice Chairman David Schoemaker, IrvingDirector, District #10Tony Pack, N. Richand Hills 1-01-12 12-31-14Area DirectorDarren Lancaster, ArlingtonDirector, District #22Charlie Gilchrist, Weatherford 1-01-12 12-31-14Area DirectorsJerry Durant, WeatherfordJack L. Powell, Mineral WellsDirector, District #23Harry Patterson, Wichita Falls 1-01-10 12-31-12Area DirectorsCharles D. Brown, GainesvilleLarry Slack, BowieDirector, District #34Jim Snell, Dallas 1-01-12 12-31-14Area DirectorsClark Richardson, IrvingMatt Stinson, DallasDirector At-LargeTom Durant, Grapevine 1-01-11 12-31-1312

TADA Regions and Districts NORTHEAST REGION • Vice Chairman Mark Daniels, McKinneyDirector, District #1Joe W. Sandlin, Jr., Mt. Pleasant 1-01-10 12-31-12Area DirectorsGerald G. Bawcum, ParisDirector, District #8Charles Martin, Carrollton 1-01-11 12-31-13Area DirectorsCharles L. Fairbanks, Jr., DeSotoRaymond Wood, DentonDirector, District #9Bob Tomes, McKinney 1-01-10 12-31-12Area DirectorsMatt Johnson, WhitesboroBrandon Tomes, McKinneyBob Utter, ShermanDirector, District #35Randy Hiley, Mesquite 1-01-11 12-31-13Area Directors NORTHWEST REGION • Vice Chairman Joe Street, AmarilloDirector, District #28Brent Brown, Lubbock 1-01-10 12-31-12Area DirectorsFrank P. Brown, LubbockDirector, District #31Daniel Bradley, Amarillo 1-01-12 12-31-12Area DirectorsDirector, District #30John S. Roley, Littlefield 1-01-11 12-31-13Area DirectorsRobert E. Hall, Jayton SOUTHEAST REGION • Vice Chairman Mike Smith, HoustonDirector, District #5W.C. Smith, III, Pasadena 5-01-11 12-31-12Area DirectorsBrian Kelledy, BaytownDirector, District #6David Mossy, Houston 1-01-12 12-31-14Area DirectorsJack Kendall, HoustonDirector, District #15Marvin Marcell, Houston 1-01-10 12-31-12Area DirectorsChris Gillman, RosenbergJeffrey L. Haas, HoustonSteven Wolf, HoustonDirector, District #33Donnie Buckalew, Conroe 1-01-12 12-31-14Area DirectorsGeorge A. DeMontrond, III, ConroeRoger Elswick, BaytownJames Masten, HoustonDirector At-LargeJoe Chastang, Houston 1-01-12 12-31-14Area DirectorsC.J. Barnett, Baytown2012 SPRING 13

TADA Regions and Districts SOUTH REGION • Vice Chairman Milton S. Greeson, Jr., VictoriaDirector, District #17Cary T. Wilson, Alvin 1-01-10 12-31-12Area DirectorsMitchell M. Dale, DickinsonRick Davis, Lake JacksonDirector, District #18Cliff Weber, III, Cuero 1-01-12 12-31-14Area DirectorsMilton A. Killebrew, VictoriaRobert C. VonDerAu, Jr., El CampoDirector, District #20Phillip Neessen, Kingsville 1-01-11 12-31-13Area DirectorsPete Ganis, AliceT.H. Gardner, Aransas PassDirector, District #27Roland F. Smith, Pharr 1-01-12 12-31-14Area DirectorsKirk A. Clark, McAllenMark Roberts, Brownsville SOUTHWEST REGION • Vice Chairman Rick Cavender, San AntonioDirector, District #19Jon Hill, Brenham 1-01-10 12-31-12Area DirectorsW. P. Clark, Jr., LockhartDirector, District #21Paul S. Kane, San Antonio 1-01-11 12-31-13Area DirectorsDirector At-LargeW.M. “Rusty” Rush, New Braunfels 1-01-12 12-31-14Director, District #24Sean F. Gunn, San Antonio 1-01-12 12-31-14Area DirectorsBilly Cavender, Jr., San AntonioHunter Hale, San AntonioGus Henderson, San AntonioDwight A. Koepp, La VerniaRob Sabom, San AntonioDirector, District #26April Ancira, San Antonio 1-01-10 12-31-12Area DirectorsRobert M. Cavender, San AntonioChristie L. Kahlig, New BraunfelsDavid Kemp, SelmaTony Rimas, San Antonio WEST REGION • Vice Chairman Larry Hall, AbileneDirector, District #16Scott T. Wilson, Boerne 1-01-11 12-31-13Area DirectorsGregory D. Bruner, StephenvilleLee Hoffpauir, LampasasTrey Ratliff, LlanoDirector, District #25Mike Dunnahoo, Abilene 1-01-12 12-31-14Area DirectorsMark Hanner, BairdRay Lubke, BradyDirector, District #29Doss Rogers, Midland 1-01-12 12-31-14Area DirectorsSandra Wheeler Evans, StantonJames E. Wheeler, StantonDirector, District #32Dennis R. Neessen, El Paso 1-01-11 12-31-13Area DirectorsSteve Fox, El PasoClay Lowenfield, El Paso14

An Interview WithChairman of the BoardStacey Gillman WimbishDescribe your background.What did you study incollege? Have you alwayslived in Texas?I had the opportunity to attendNADA’s Dealer Candidate Academy.My study dealership wasFrank Gillman Pontiac, establishedby my grandfather in 1938. It was alarge store with wonderful history,once the largest Pontiac dealershipin the country.Dad decided to send me to Car College,the old GM dealer son school.I spent 30 days in “somewhere”Georgia learning about a GMfinancial statement, (every line ona GM financial statement). DavidAlderson was my classmate.Tell us about your family.My children are my greatest job andlife’s work. I have a daughter 13and a son who is 9. I am so thankfulfor them, precious gifts from God.A lot of dealers get into the business by chance or by default.Did you always aspire to be part of the automotive industry?I really wanted to be an international cruise director exploring the world. To bea cruise director you have to be fluent in at least 2 languages, so I went to studySpanish in Spain.After a fun-filled college experience, I asked dad for a job. I did not know anythingabout cars. I loved the hours - noon to 9 p.m., and loved the “commission”.I enjoyed it so much.What’s your favorite way tospend your free time? Anyunusual hobbies?My spare time is spent trying tostretch the quality time with mykids. No cell phones – avoidingscreen time. We like to go to bookstores,going for sushi, having lotsof play dates and sleepovers. We tryto spend either Friday or Saturdaynight at Chequers, our little countryplace. We build campfires and haveoutdoor adventures.Do you have past experiencesthat will help you lead TADAthrough 2012?To lead you must be accountable,16

involved and engaged. Most importantly, you haveto surround yourself with great people that feel thesame way.I have worked for Gillman Companies in our executiveoffices for 20 years. I served on HADA’s board for 13 yearsand I have served on TADA’s board, AFIT’s board, andseveral franchise dealer councils.The staff at TADA works efficiently and with smoothcoordination. The dealers who volunteer their time topush a healthy pro-dealer agenda are honorable andinspiring. Ramsay Gillman always told me that if thecar business was going to be my career that I needed toinvest time in shaping our industry for all dealers. Beinga part of our association is a privilege, and I am thankfulfor this opportunity.What do you think makes TADA membershipinvaluable?TADA is invaluable because the association provides aplatform for a united voice for all dealers.To keep us ahead of the game we play:Offense – Being aware of our challenges & proactivelyseeking the best route. TADA’s legal, legislative, andeducation departments are ready for 2012 and planningfor future generations now.Defense – Curve balls are expected. TADA is very keenon not letting the “camel’s nose under the tent.” Lawyersand legislators, brokers and bureaucrats will alwaysbe there trying to squeeze our margins. Defending ourposition on the field is just as important as making thebig plays.Where do you think the auto industry isheaded in the short term, and the long term?Our auto industry is outpacing the national economicrecovery. I see this steady climb (sans earthquakes andtsunami’s) continuing over the next 10 years. Being adealer in Texas right now is a fabulous place to be.Inventories are back, lenders have stabilized, sales areup, and state tax revenues are up. We are slowly, cautiouslyrehiring. As dealers we are part of making ourstate great!Is there any pertinent legislation on the tablethat’s on your mind?Not anything specific at the moment. The last legislativesession was a major victory for us. John Zwiacher and thelegislative committee presented a bill that will protect ourproperty and facilities from manufacturer strong-arming.Milton Greeson Jr. is our new legislative director. In thenext session in 2013, I think we will have to watch out forproposed increases in taxes, fees and regulation. We havewonderful allies in the capitol.What keeps you involved in TADA? Whatinspired you to serve as a leader in theAssociation?What keeps me involved is that I see value in the association.The time investments I make come back to ourdealership. I can attribute real dollars that fall straight tothe bottom line to many of TADA’s initiatives. I can see,touch, and feel a return on my investment.The dealers make it happen. Never under-estimate theinfluence that a dealer has in his community. With aunited voice we have shaped our state laws and regulatoryoffices, earning us an enviable position amongst all otherstate associations. It is important to keep us together.The big dealers cannot do it without the smaller dealers– the rural can’t do it without the metros. United we willstand - tall and proud.What’s in store for the membership this year?Our April conference will be in Austin, the hub of politicalpower. The Welcome Reception and Chairman’sDinner will be held on Sunday, April 15 at the Bob BullockTexas State History Museum with entertainmentby Stephen Smith, son of Mike Smith. The conferencewill be held on Monday, April 16 at the newly updatedDriskill Hotel. Highlights will include an informativesession led by Glenn Mercer regarding his NADA whitepaper on facility requirements by manufacturers. Wewill honor our 2012 legend, Robert H. Hoy, Jr. fromEl Paso.What’s in store for TADA in the future?The future of TADA lies with the young people that willlead us 10 – 30 years from now. I am so appreciativethat TADA had a “future dealers” group when I was 22years old. Steven Cavender was a “future dealer” withme. Thankfully we grew up and matured enough forTADA to invite us back. The next generation, the TexasDealer Academy, is being led by Tim Crenwelge. Timhas amassed a huge group of close to 60 young men andwomen that will have the same opportunity that I had.They have already survived recession, bankruptcy andearthquakes. I think these young men and women willbe strong and fit for the challenges ahead. The TexasDealer Academy conference in June will be in held inThe Woodlands. 2012 SPRING 17

Advertising OpportunityTADA Annual2012-2013 Membership Directory“The TADA Membership Directory is a resource I personallyuse regularly to get contact information on fellow Texas dealers,as well as, TADA staff. The Directory is a valuable resource tokeep in your desk for when you need to locate or contact someoneabout an issue or just ask a question. Without the companies thatadvertise in the Directory, we would not have access to such ahelpful resource.”— Craig W. Kinsel, Kinsel Motors, Inc., Beaumont, TXTADA DIRECTORY AD“I think it is nice to have the directory in your desk and be ableto call any dealer in the state, also a good way to support youassociation at the same time.”— David Alderson, Alderson Enterprises, LP, Lubbock, TX“As the owner of a Texas dealer group, we always prefer to dobusiness with companies that support the Texas AutomobileDealers Association. By advertising in their annual directory,it gives our managers a quick reference as to which companiessupport our organization. We currently do business with 15companies that advertised in the 2010 directory and look forwardto increasing that number this year.”— Mark Daniels, Four Wheels Autogroup, McKinney, TXBe a part of TADA’s Annual MembershipDirectory. Have your own full-page, halfpage,quarter-page, business card listing,section divider page or even the inside oroutside cover in this publication.The directory will be a full color book(8 1/2” x 11”) distributed to every TADAmember new car and truck dealer acrossTexas to be used as a handy referenceguide for at least one full year.Ads must be received no later than April 18, 2012Contact the TADA office atcommunications@tada.org for details.2012 SPRING 19

20Texas Celebration2012 NADA ConventionLas Vegas, Nevada

2012 SPRING 21

Collin Sewell ReceivesDealer Education Awardidentified by their teachers as being potentiallyat high risk for suffering from hungerduring the weekend. Today, over 1,200students receive food each Friday andover 300 volunteers sack food each week.As a charter member of the EducationFoundation of Odessa, Mr. Sewell wasinstrumental in initiating and organizingmany events for the foundation. He hassupported an annual fundraiser that hasgenerated more than $1 million in donationsover the past ten years within thelocal school district and The Food 2 Kidsprogram to help those in his communitywho live in poverty. Sacks of food aresent home on Fridays with school childrenMr. Sewell also helped to launch theAVID Scholastic program within theschool district focused on creating lifelonglearners and college graduates. This initiativeadopted by the local district now hasmore than 1,400 students involved andhas seen over 100 students attend collegewho otherwise would not have gone. He isalso heavily involved in the organizationEQUIP, a program that provides leadershipteaching to over 5 million peopleinternationally.Locally, he is the recipient of theGeorge E. “Buddy” West LeadershipAward, presented annually to individualswho demonstrate leadership comparableto the great presidents of the United States,and the Heritage of Odessa Award. Northwood University is proud to present CollinSewell the Dealer Education Award for his ongoingcommitment to, and support of, higher education, hiscommunity and the automotive marketing industry."TEXAS TRADITIONS"TADA Annual ConferenceApril 15-16, 2012The Driskill HotelAustin, TexasGlenn Mercer who conducted the NADA Factory Image programstudy will headline April’s TADA Annual Meeting. This is the hottesttopic in the industry today and you can hear it in person on April16th at the Driskill Hotel in Austin.Victor Vandergriff, Chairman of the Texas Motor Vehicle Board,and political expert and forecaster, Ted Delisi will provide insightinto one of our most critical state agencies and define the currentpolitical landscape so crucial to the success of franchised dealers.We have reserved the entire Bob Bullock Texas State History Museumfor the opening night Chairman’s dinner. So bring the family, tour themuseum, enjoy the music of Stephen Smith while honoring TADA’s2012 Chairman of the Board Stacey Gillman Wimbish.Please make your plans to join dealers statewide.2012 SPRING 23

COUNSELOR’S CORNERCase Law Update:Third Court of Appeals Limits Dealers’ Rights toChallenge Replacement Franchise AgreementsBY WM. DAVID COFFEY, III, WM. DAVID COFFEY III & ASSOCIATES, AUSTIN, TXThis article is the opinion of the author and is not endorsed by TADA.A dealer may wish to seek their own legal counsel.of a dealer’s right to challenge replacementfranchise agreements under TOC§ 2301.454.The facts of the case are as follows:Dealer had previously entered into afranchise agreement with its distributorwhich contained a provision allowingthe distributor to require Dealer to replaceits longtime General Manager withone of the distributor’s choosing shouldthe dealership fail to achieve “sales efficiency”within a stated period of time.After the term of the agreement expiredand the dealership failed to achieve salesefficiency, Dealer became concerned dueto a recent threat from the distributor thatit would enforce the GM provision in thereplacement franchise. The provisionhad never been enforced before. Dealerdid not receive the statutory notice of thereplacement from Distributor but was apprisedof its statutory rights by counsel andfiled its complaint under TOC § 2301.454in order to keep its GM.This distributor replaces its franchiseagreements every few years, sometimeswith material modifications and sometimeswithout. In this case, Distributorreplaced the existing franchise with anew franchise with substantively identicalprovisions, including the provisionrequiring Dealer to replace its GM in theevent that the dealership failed to achievesales efficiency.Texas Occupations Code (“TOC”) § 2301.454 is animportant dealer protection law which can be used tocontest harmful franchise provisions in what essentiallyare take-it-or-leave-it adhesion contracts.Distributor opposed Dealer’s use ofTOC § 2301.454 to challenge the replacementagreement on the ground that keylanguage in the statute allowed Distributorto determine, in secret and withoutnoticing the dealer, whether the modificationor replacement would harm the dealerand, based on that determination, givestatutory notice or not as it saw fit.The authors of this article believe thatTOC § 2301.454 was designed torequire distributors to provide to dealersa statutory notice in the event that thedistributor “modifies or replaces” the dealer’sfranchise agreement. If a dealer believesthat the modification or replacement willadversely affect his sales, investment orobligations to the public, he may file aprotest at the Motor Vehicle Division ofthe Texas Department of Motor Vehicles.A hearing will then be held to determinewhether the distributor has “good cause”for the modification or replacement.Unfortunately, a recent Third Courtof Appeals decision has limited the scopeThe language at issue reads, in pertinentpart, as follows:“… [A] manufacturer, distributor, or representativemay not modify or replace afranchise if the modification or replacementwould adversely affect to a substantial degreethe dealer’s sales, investment, or obligationsto provide service to the public, unless:…”24

The moral of the story, then, is to carefully evaluate any modifications to yourfranchise to determine if they may harm your dealership. If so, you may havea right to protest under TOC § 2301.454. Be aware though, if the replacementfranchise contains no material modification, there is no relief under TOC § 2301.454.two conditions are met: (1) the distributor provides the statutorynotice, the dealer gets his ‘good cause’ hearing, and (2)the MVD determines that there was good cause for the modificationor replacement.Only then may the distributor modify or replace against thedealer’s opposition.The matter went to trial in 2007 before an MVD AdministrativeLaw Judge (“ALJ”). The ALJ issued a proposed rulingcalled a Proposal for Decision (“PFD”). The ALJ held that sinceDistributor had implemented a business plan which replaced itsfranchises every two years and since those franchises affectedevery aspect of the business relationship between Distributor andDealer that, therefore, the statute must be read as requiring thedistributor to give the statutory notice and the MVD to give thegood cause hearing. The ALJ also determined that the distributorhad not shown good cause for the replacement franchise becauseit had not shown that its sales efficiency formula was reasonable.This PFD then went to the Director of the MVD, the statutory,final decision-maker for contested cases at that time. TheDirector reversed the ALJ and determined that the language inTOC § 2301.454, above quoted, allowed Distributor to decide if itwould give the notice or not as it saw fit, and since no notice issuedfrom Distributor, dealer would not get its good cause hearing.Dealer then appealed the matter to the Travis County DistrictCourt. Dealer argued that the agency’s decision effectively allowsthe distributor to act as the gatekeeper to a dealer’s statutoryrights. The district court reversed the agency and determined thatthe above-quoted language did require notice from the distributorregardless of the distributor’s private determination on theadverse affect issue, and if the dealer protested the “modificationor replacement,” the Dealer was entitled to a good cause hearing.Distributor appealed this judgment to the Third Court of Appealsin Austin. The Third Court’s opinion recently issued andheld that since there was no substantive difference between thereplaced agreement and the replacing agreement that, therefore,there was no adverse affect on Dealer, as a matter of law, so nonotice or hearing was required. This despite the fact that Dealercould lose its preferred GM as the result.This, then, is the status of the case.The Third Court’s ruling affects all franchise agreements inthat it makes statutory notice discretionary in the distributor,but only restricts a dealer’s right to challenge an agreement thathas not been modified. The ruling does not attempt to restrict adealer’s right to protest a material change or modification to itsfranchise agreement under TOC § 2301.454.Unfortunately, under the Third Court’s interpretation, becauseit is at the distributor’s discretion to give dealers notice of thisright, this effectively means that dealers won’t get notice, sincewhat distributor is going to admit that a franchise modificationis harmful by giving that notice?The moral of the story, then, is to carefully evaluate anymodifications to your franchise to determine if they may harmyour dealership. If so, you may have a right to protest underTOC § 2301.454. Be aware though, if the replacement franchisecontains no material modification, there is no relief under TOC§ 2301.454. It is always important to consult with counsel whenmaking this determination.In the meantime, dealers who face a similar fact situationas Dealer should also consult with counsel because the ThirdCourt, in its opinion, has also recommended some alternativestatutory relief to TOC § 2301.454. Possible options includeTOC § 2301.467, a prohibition against requiring adherence tounreasonable sales or service standards, and TOC § 2301.476(c)(2), a prohibition against distributor control of a dealership. 1The full text of TOC § 2301.454 can be viewed at our website www.wdcoffeylaw.com.2Docket No. 03-11-00223-CV3The Third Court defined “sales efficiency” as “…a function of expected sales of [Distributor]vehicles in the dealer’s Primary Market Area (“PMA”) compared to a dealer’s actual sales. In determiningsales effi ciency, the dealer’s actual sales, regardless of whether the vehicles are ultimately registered to ownersin the dealer’s PMA or sold for use elsewhere, make up the numerator of the sales effi ciency ratio. Thedenominator is determined by multiplying all new vehicle registrations in the PMA (regardless of vehiclebrand) by [Distributor’s] fi ve-state regional market share. Thus, if [Distributor] has a 20% regionalmarket share and 1,000 cars of any brand are sold into [Dealer’s] PMA,[Dealer’s] expected sales wouldbe 200 cars, and for [Dealer] to satisfy its sales performance objectives, it would have to sell at least 200cars (200 actual sales / 200 expected sales = 100% sales effi ciency). In a PMA with more vehicle registrations,a dealer servicing that area would have to sell more cars to achieve sales effi ciency, and in a PMAwith fewer registrations, the sales objective could be met with fewer sales. The regional market share, however,is determined without regard to differences in local markets.” (Opinion, Docket No. 03-11-00223-CV, p.3 fn 5)4Tex. Occ. C. § 2301.454WM. DAVID COFFEY III & ASSOCIATES, David Coffey and Martin Alaniz at (512)328-6612, email: info@wdcoffeylaw.com, or visit us at www.wdcoffeylaw.com.After four sets of decision makers, the score is Distributor 2vs. Dealer 2, but the Third Court’s ruling is the current law onthe issue unless the Supreme Court is invited to weigh in.2012 SPRING 25

© 2012 Texas Mutual Insurance CompanyReduce Your Costs and Workplace Injuries.Ride the Road to Savings.The Lone Star Auto Dealers Safety Group combines your business with other Auto & Truckdealerships to provide workers’ comp premium discounts and job-specific safety resources.As a member of the safety group, eligible dealerships may also qualify for both group andindividual dividends and receive a discount for choosing the health care network option.Ask your agent about the Lone Star Auto Dealers Safety Group, or contactBrad Wicker at (877) 694-2537 or bwicker@nts-online.net.Dividends are based on performance and are not guaranteed.

Texas Auto Dealer Mike Shaw Named2012 NationalAuto Dealer of the YearMike Shaw, dealer principal ofFernandez Honda in San Antonio,Mike Shaw Toyota and MikeShaw Kia in Corpus Christi, hasbeen named the 2012 NationalTIME Dealer of the Year.Shaw received this honor out of aselect group of dealers from acrossthe country recognized at the 95thannual NADA Convention & Expositionin Las Vegas on Saturday, February 4.The TIME Dealer of the Year awardis one of the automobile industry’s mostprestigious and highly coveted honors.Recipients are among the nation’s mostsuccessful auto dealers who must alsodemonstrate a long-standing commitmentto community service.Shaw, 65, was chosen to represent theColorado Automobile Dealers Associationin the national competition – one of only50 auto dealers, from 17,000 nationwide,nominated for the 43rd annual award.A panel of faculty members from theRoss School of Business at the Universityof Michigan selects one finalist fromeach of the four NADA regions and onenational Dealer of the Year.“My mantra in business is that qualitycomes first, customers are always the focusand integrity is never compromised,”Shaw said. A 1964 graduate of WeslacoHigh School in Weslaco, Texas, Shawearned a degree in business managementat Texas A&M University, where he was adistinguished military student and graduate.He later served as an officer in the U.S.Army and spent one year in Vietnam beforereturning home to refocus his career inthe automotive industry, where he workedbefore leaving for service. “I fell in lovewith the car business and knew instantlythat was where I belonged,” he says.After managing and owning a string ofdealerships, he launched the “Mike Shaw”branded stores in 1994 with Mike ShawChevrolet Saab in Denver. Today, he hassix other dealerships in Colorado, Louisianaand Texas. “My actions and ethicsas a dealer have helped me become one ofthe largest minority-owned car dealers inthe nation,” Shaw explains. His two sonsalso work for the business.In the area of community service,Shaw incorporates his business expertiseto advance his philanthropic causes.“Family, ethical behavior and educationare values that have guided me to success,”he says. “I am in the business of selling,and I bring those same skills to the communityorganizations I serve.” In fact, hehelped the Boy Scouts turn their popcornfundraiser from a $200,000 program intoa $3 million bonanza. “I set it up as if itwas one of my dealerships and the Scoutswere salesmen,” Shaw says.For the past 17 years, he’s been involvedwith numerous projects and organizations,including Boys & Girls Clubsof America, Urban League of Denver,Make-A-Wish Foundation, ColoradoAids Walk, Food Bank of the Rockies,American Cancer Society (golf classic),Crime Stoppers, Executive Women Internationaland Seniors Inc., to name afew. His efforts have garnered numerousawards, but the one that means the mostto him is the Scouting…Vale La Pena!award, a national Boy Scout award givenfor service to Hispanic-American/Latinoyouth. “I am honored and humbled asthe first recipient,” Shaw said. “Sincefrom an early age the Boy Scouts wereinstrumental in molding me and instillingmy ethical and core values, it is such anhonor to be recognized for giving backand impacting the lives of our futureleaders in this way.”He has also been an advisor andserved on the boards of the NationalWestern Stock Show, St. Joseph HospitalFoundation, Denver Zoological Foundation,Texas State Aquarium, KempeFoundation and many others, as wellas spearheading numerous fundraisingevents. Shaw says, “I am a person whodeeply cares about kids and their education,especially kids who come fromlow-income backgrounds. I am convincedthe key to success is education, and thus,my commitment to kids and education isa driving force. I also believe that whatyou give, you get back tenfold.”Shaw and his wife, Nancy, have threechildren and three grandchildren. He wasnominated for the TIME Dealer of theYear Award by Tim Jackson, presidentof the Colorado Automobile Dealers Association.2012 SPRING 27

“My focus is running mydealership—not worryingif my business is protectedor how to generateincome in my financedepartment. Zurich letsme do that.”One insurance company for your businessinsurance and F&I product needsIn 2011, more than 1,300 dealerships purchased both business insuranceand F&I products from Zurich. Products such as our Unicover ® policy, whichpackages most of the coverages needed by dealerships into one policy. Or ourStreamlined Selling System ® , which can help you drive increased F&I profit.One company for all your needs, backed by 90 years insuring dealerships.Call Mark Brown, Regional Sales Manager in Houston at 512-699-8842 orWinston M. Tripp, III, Regional Sales Manager in Dallas at 469-767-6262or visit www.zurichna.com/SDA1 for more information.Insurance coverages and non-insurance products and services are underwritten and provided by individual member companies of Zurich in North America, including Universal Underwriters Insurance Company andUniversal Underwriters Service Corporation. Certain coverages, products and services are not available in all states. ©2012 Zurich American Insurance Company

Marvin Rush:Setting the Bar HighW. Marvin Rush set 4 goals when he graduatedhigh school. He planned to become a GeneralMotors dealer, own a bank, take a companypublic, and reach over $1 billion in annual sales— some pretty high goals for an 18-year-old.Rush achieved his first goal before he was 30 when he foundedRush Enterprises, Inc. in 1965. He and two partners openedtheir first GM truck dealership in Houston, Texas.Rush served as president of Rush Enterprises for 30 years,before taking the position of CEO and Chairman of the Board.In 2006, Rush’s son Rusty took on the role of CEO, while Rushcontinued to serve as Chairman — the position in which hecurrently serves.Since the inception of Rush Enterprises, Rush’s vision was tobuild a network of dealerships to sell, lease and service trucks.In 1967, he expanded the company when he added the Peterbiltfranchise, kicking it off with the sale of his first 100-unit fleet.Rush purchased his first bank in 1993 — goal accomplished— and today serves on the board and is a major stockholder ofTexStar National Bank in San Antonio.After Rush bought out his founding partners, he acquiredseveral more dealerships and Rush Enterprises eventuallybecame the largest network of commercial vehicle dealershipsin the country, selling Peterbilt, International, Hino, Isuzu,Ford Mitsubishi,UD, Autocar, BlueBird, IC, Diamondand Elkhart. Rushwas leading the companyto great heightsand in 1996, he was ableto achieve another one of hisgoals; Rush IPO went public andwas listed on the NASDAQ under the symbol RUSH.Today, the network of dealerships provides one-stop sales andservice, aftermarket parts, service and body shop capabilities,chrome accessories, tires, financing and insurance, and leasingand rental services. Rush Enterprises now has over 100 locationswith almost 3,000 employees, and annual sales over $1.2 billion— Rush’s final goal accomplished. Locations are in Alabama,Arizona, California, Colorado, Florida, Georgia, New Mexico,Oklahoma, North Carolina, Tennessee and Texas.Rush has served on several boards, including the NationalAutomobile Dealers Association, American Truck Dealers Division,and currently serves on the board for the Texas Departmentof Motor Vehicles.Not only has Rush accomplished all his major goals, hereceived countless awards along the way, including the NorthAmerican Peterbilt Dealer of the Year in 1993, 1994, 2000 and2001; 2007 Regional Award for Entrepreneur of the Year; AmericanTruck Dealers’ 2008 Dealer of the Year; and NorthwoodUniversity Business Leader in 2009. visit us atwww.tada.org2012 SPRING 29

Raymond Palacios:President of Bravo Chevrolet Cadillac Dealershipsin El Paso and Las Cruces. These communitieshave been a true blessing for meand my family.”Palacios was recently appointed toserve on the board of the Texas Departmentof Motor Vehicles. His goal is tohelp to ensure that the Texas Departmentof Motor Vehicles provides necessary servicesto the citizens of Texas in the mostproductive and efficient ways possible.“I believe it is our duty as boardmembers to review practices within eachdepartment of the DMV,” said Palacios.“We need to ensure that these practicesdo not unnecessarily hinder commerce.Instead, our focus should be on facilitatingcommerce and growth for Texas.”After visiting downtown Houston andseeing the countless business peoplein suits and ties, a 15-year-old RaymondPalacios, Jr. knew he wanted toattend college and become successful.Today, he is President of Bravo ChevroletCadillac dealerships in El Paso and inLas Cruces, employing more than 150people. Through this leadership, he worksto improve the quality of the lives of hisemployees and their families. To Palacios,that is the very definition of success.“Success isn’t just about one person; it’sabout everybody,” said Palacios. “If youcan’t bring anybody up, then to me, youhaven’t been a success.”Palacios earned a degree in accountingfrom the University of Houston andfirst worked as an auditor for a nationalaccounting firm, before joining PerryHomes, a Houston-based homebuilderand land developer, where he worked for10 years as a CPA and financial officer. Inthat time, he had become vice president ofthe company, but Palacios felt that it wastime to venture out and run his own businessin the automobile industry. The ideawas something he first thought about asa college student.“Back then, one of my jobs was workingthe grave yard shift as a security guard ina large car dealership in Houston,” saidPalacios. “I remember walking aroundthe lot thinking about how cool it wouldbe to own a dealership.”In the mid-90s, Palacios entered theGeneral Motor’s dealer developmentprogram, which eventually led him toEl Paso and Las Cruces, New Mexico.He worked as a car salesman, used carmanager and eventually general managerof a dealership.Palacios left Houston in 2000 to ownand operate a Cadillac Oldsmobile dealershipin El Paso.“Houston was home for me and myfamily,” said Palacios. “We never imaginedthat we would leave; however, as itturns out, our greatest opportunities werePalacios is a past district director of theTexas Automotive Dealers Association.He has also served as past president ofthe El Paso New Car Dealers Association,past vice chair of General Motors’Minority Dealer Advisory Council, anda past member of the National ChevroletDealer Advisory Council and the HummerDealer Advisory Council.In regards to his membership in TADA,Palacios says, “We are fortunate to havevery dedicated and competent TADAdealers in leadership positions and staffmembers who work tirelessly and fightfor the interests of its members. TADAis not only a voice of franchised dealers,but is a strong and effective advocate forour industry.”Palacios and his wife Kathy have twosons in college — one at Oberlin College inOhio and one at Northwestern Universityin New York. 30

HOW DEALERS TAKE CONTROLOwn your own program.If you want control, you need to own your ownprogram -100%. True control means 100% ownership,not some is theirs and some is yours.You know this.Portfolio delivers this to you. By setting you up ina company that you own 100%, we enable you tocontrol your destiny- both as a dealership owner, andas a human being with personal goals. Like takingcare of your family’s future. Like creating a very profitablepersonal wealth asset outside your dealershipthat no one can take from you.It’s about your future.With Portfolio you own 100% of the underwritingprofits and investment income from selling anddelivering on the promises of Vehicle ServiceContracts and any other F&I products that helpyour customers protect their vehicles. Yourcustomers expect this protection, and youneed to control the means to provide it.QUESTION:ANSWER:Did you ever ask yourself whyall these outside companieswant your F&I business undertheir control?There’s good money on the tablethat’s got to go to someone.100% OWNERSHIPEQUALS TRUE CONTROL.Create even more personal wealth by earningthe underwriting profits and investment incomefrom even more F&I products:• Dealer CPO and limited warranties• GAP insurance• Customized Maintenance programs• Appearance Protection products• Tire and Wheel products• Anti-Theft and Key Replacment products• and more...Take advantage of our income developmentand training programs that make your dealershipsuccessful on both the front end and theback end.To take control of your future, contact Michael Hall.office [405] 285.5988 mobile [214] 578.8541Profit Concepts is a full-service F&I agency serving dealersthroughout the Southwest since 1990.www.Profit-Concepts.com

of local economies throughout Texas.Whether metropolitan or rural counties,they provide jobs for a wide range of skills— trained mechanics, motivated sales staffand savvy marketing personnel.Car dealers across the state show greatcommunity spirit; in many small towns,their civic commitment in sponsoringschools, sports fields, libraries and countlessother local activities is invaluable.The auto industry is typically thesecond biggest tax contributor to staterevenues — just shy of $3 billion in motorvehicle sales and rental taxes was generatedin fiscal 2011 and more than $3.2billion is expected in fiscal 2012. Retailsales and use tax is the biggest tax sourceof tax revenue for Texas state government,raising $21.4 billion in fiscal 2011.Improved Auto SalesBoost State Revenue,Texas EconomyDealers forecast continued growth during2012, cite better products and inventoryBY SUSAN COMBS, TEXAS COMPTROLLER OF PUBLIC ACCOUNTS“Motor vehicle sales tax is a good barometerof the state’s economic health,”says John Heleman, the Comptroller’schief revenue estimator. “Followingthe downturn, Texas has replaced lostjobs more vigorously than in the U.S.as a whole. The state has added backthe 433,000 jobs lost during the recentrecession; by comparison, the federalrecovery has been much slower withonly 36 percent of jobs recovered byJanuary 2012.”Heleman says that is good news forthe Texas auto industry. “As people seeimproved job prospects, they are puttingthemselves in position to buy a car.”Automobiles are a big-ticketpurchase in almost anybudget and visibly reflect theAmerican consumer mood.In that context, the 13.2 percent growthof Texas motor vehicle sales tax revenuein fiscal 2011 is welcome after twoconsecutive years of declining revenuesillustrated the crunch that Texas auto dealersfelt in fiscal 2009 and 2010.The recession-fueled crisis in consumerconfidence and credit prompted Americansto keep their vehicles longer, thushurting auto dealers’ revenue, governmentrevenue and manufacturers’ bottom lines.As the worst of the economic contractionsubsides, manufacturers are respondingto stricter fuel economy regulations, thereality that high fuel prices are not ananomaly, and the need to earn the trust ofconsumers who are spending their hardearneddollars on a vehicle that lasts.Auto sales are valuablesource of state revenueAuto dealerships are cornerstonesComptroller’s office projectspent-up demand willcontinue to boost auto salesMotor vehicle sales have continued totrend upwards in the first half of fiscal2012 and the Comptroller’s CertifiedRevenue Estimate anticipates another 8.5percent growth this year, although thatdemand may not hold up through fiscal2013. An estimated $6.3 billion revenueis expected from motor vehicles sales taxduring the 2012-2013 biennium.“We expect the pent-up demand followingtwo years of lower sales to continue Texas Economy — continued on page 342012 SPRING 33

Texas Economy — continued from page 33stimulating the car and truck market in2012,” Heleman says. “After puttingoff new car purchases, consumers andbusinesses are more willing to buy newvehicles and take advantage of more availablecredit and dealer and manufacturerincentives.”That’s been borne out in the Comptroller’snet value of auto sales monthlyestimate. At $42.1 billion in sales, fiscal2011 marked a 13 percent increase from2010. The first four months of fiscal 2012performed even better; September throughDecember sales valued at almost $15.4 billionrepresent a 16 percent increase.Stacey Gillman Wimbish, BoardChairman of the Texas Auto DealersAssociation (TADA) says auto dealers,particularly in Texas, are confident thepent-up demand could boost sales foryears to come.“I don’t see it slowing. We had such tremendousgrowth from 2002 to 2008; thatwas six years of amazing car sales beforethe bottom fell out of the car market andeverybody began holding onto their cars,”says Wimbish, president of the GillmanAutomotive Group, which has 14 domesticand import dealerships in Houston, SanAntonio and the Rio Grande Valley. “Weare going to see a lot of people trading inthose cars they bought from 2002 to 2008.”According to IHS Global Insight,national December car sales rounded outthe best quarter for sales since secondquarter 2008.“Year-end promotional activity andcontinued strength in light-truck sales produceda [December] seasonally adjustedselling rate of 13.5-million units. That wasjust below November’s 13.6 million pace,helping to deliver a fourth-quarter salesrate of 13.4 million units, the best quarterof the year and highest quarterly pace sincethe second quarter of 2008,” IHS reports.Dealers point to Texans’need for transportationTexas has recovered from the recessionfaster than any other section and continuesto add thousands of residents each month.Entering 2012, the estimated populationof Texas topped 26 million.Milton Greeson, president of AtzenhofferChevrolet in Victoria says that improvedsales reflect rising consumer confidence.A loosening of credit has helped,but consumers are more sensitive thanbefore to interest rates and their monthlypayment when financing a vehicle.“I think the confidence in the economyis improving in the Victoria area,” he says.“There is some logic to pent-up demandfalling off. But it is difficult to determinehow long that would take.”Since the turn of the century, the 20percent population increase — centeredon the state’s largest metropolitan areas— has translated to almost 3 million additionalcars and trucks. Auto dealers arewelcoming customers back to showroomsin greater numbers and are eager to buythe safer, better-built vehicles equippedwith improved technology in the cabinand under the hood. Texas Economy — continued on page 3634

Texas Economy — continued from page 34“I know we are the envy of dealersin many states as we see our populationgrow,” says Stephen Cavender, presidentof Cavender Toyota, San Antonio. “I thinkTexas dealers are guardedly optimisticabout the future.”Cavender Toyota is projecting a 15 to20 percent increase in sales volume in2012, he says. That will be helped in partby access to better inventory, both newand used.“For the most part, I think people areback in dealer showrooms,” he says. “Weare seeing people more comfortable makingbig ticket purchases again.”That’s reflected in state motor vehicletax revenues — good news for the state— and a welcome return to hiring bycar dealers.“There’s not a car dealer in Texas whodidn’t feel the effects of economic downturnand recession,” says Cavender, whoserved as 2011 TADA board chairman.“We all made cutbacks, we asked moreof our employees and retained fewer onour payrolls. We all learned very valuablelessons about running our businesses. Ithink in the back of every dealer’s mind,we have to be thoughtful and mindfulthat although the economy is better, otherthings can affect sales.”The 2011 Japanese earthquake andsubsequent nuclear power station crisisthat interrupted parts supply and productionfor Toyota and other Japanesebrands halted production at the Tundraplant in San Antonio and affected whatwas shaping up to be a “great year,”Cavender says.“I can’t over emphasize the [negative]effect of not having enough inventory,”he says.More vehicles on Texasroads, but makeup haschangedGrowing population has boosted thenumber of vehicles on Texas roads anddrivers are using different criteria whenchoosing what to purchase.Wimbish says the sales recovery seenin used vehicles and domestic brands in2011 will be followed by a push in importsales this year, particularly vehicles builtby Asian automakers. Texas Economy — continued on page 3836

More Cars and Trucks Hit the Road Each YearType of registrationFiscalYearPassenger

Texas Economy — continued from page 36“Even with our inventories so low — down to 15 days supply— we still sold the same number of cars as during 2010,” she says.“But because of low new-car inventories, we sold a tremendousnumber of used cars last year.”Buyers returning to the showroom after several years will bepleased with the quality of new vehicles on sale, she says.“The competition between manufacturers is intense, so theyhave to make a better product,” she says. “The quality is betterthan we’ve ever seen, the styling is better, and as people trade intheir cars, they will be amazed.”Between 2001 and 2011, privately owned passenger cars, lighttrucks and motorcycle registrations increased in Texas by morethan 19 percent. Trucks declined slightly as a percentage of theoverall growing fleet, but still represent more than 31 percent ofall registered vehicles.The Atzenhoffer group has sold Chevrolets in Victoria sinceGreeson’s grandfather started the business in 1926. It has expandedover the years by adding Cadillac to its General Motorsofferings, as well as Mazda and Mitsubishi showrooms and a bigwholesale parts operation.“Diversification is good; it gives a wider variety for customersto choose from and an increased ownership base for the dealership,”says Greeson, president of Atzenhoffer and a TADA executivecommittee member. “In the auto industry, if you have aparts and service business, it offers something to fall back on. Werun a very large wholesale parts business selling to independentbody shops and other auto dealers. It helped in tougher times.”Oil’s opposite effectsThere’s no denying that the oil and natural gas industry is abig influence on the Texas economy and the huge fluctuationsin wholesale prices have affected government revenues as wellas costs to consumers and businesses, although not often in thesame way. For drivers and businesses, higher oil prices translateto higher prices at the gas pump.“But I think the shock value of $4 per gallon gasoline is goingto be less dramatic,” Wimbish says. “Because of this pent-updemand and a lack of inventory last year with the imports, I amvery optimistic for this year and the future.”The state’s share of gasoline tax revenue is fixed to the numberof gallons sold, not linked to price, so that revenue stream is nothelped with higher prices — in fact, reduced consumer demandhurts state coffers. Conversely, oil and natural gas severance taxrevenues increase when production and/or prices rise.For Atzenhoffer, the effect of Eagle Ford Shale Play drillingand pumping continues to be extremely positive.38

“Our retail sales in 2011 were up 27.5 percent over 2010,”Greeson says. “Eagle Ford has stimulated this particular marketwith production and infrastructure. In conjunction with that,Caterpillar is moving to Victoria building a significant plant forexcavator assembly. Initially, they announced 500 jobs, now thathas grown to 800.”Track the auto industry’s monthly sales value, oil and gasindustry prices and drilling activity, and find regular updates onthe state’s economic situation from Comptroller Susan Combs atwww.TheTexasEconomy.org. Net Value of Texas Auto SalesUnits $ millionMonth FY YTDJan-07 3,669.5Feb-07 3,717.8Mar-07 4,128.7Apr-07 4,233.3May-07 4,227.3Jun-07 4,159.0Jul-07 4,368.3Aug-07 4,383.8Sep-07 4,294.2Oct-07 4,303.5Nov-07 3,678.9Year todateDec-07 3,828.5 16,105.1Jan-08 4,034.0Feb-08 3,840.8Mar-08 3,940.0Apr-08 3,957.8May-08 3,791.7Jun-08 4,051.0Jul-08 4,148.3 Fiscal YearAug-08 3,829.4 47,698.1Sep-08 3,727.2Oct-08 3,317.6Nov-08 2,862.9FY todateDec-08 2,941.7 12,849.4Jan-09 3,022.6Feb-09 2,923.8Mar-09 2,892.3Apr-09 2,501.8May-09 2,591.1Jun-09 3,111.4Jul-09 3,071.0 Fiscal YearAug-09 3,111.9 37110.4Sep-09 3,357.9YOY %IncreaseOct-09 2,859.6 -24.3674276FYTD %Increase-20.21533551Nov-09 2,536.5FY todateDec-09 2,813.6 11,567.6Jan-10 2,815.3FYTD %IncreaseFeb-10 2,969.2 -9.971Mar-10 3,356.2Apr-10 3,011.3May-10 2,852.6Jun-10 3,490.5Jul-10 3,460.0 Fiscal YearAug-10 3,587.7 37,110.4Sep-10 3,432.6YOY %IncreaseOct-10 3,325.92.871842636Nov-10 3,231.1FY todateDec-10 3,265.1 13,254.7Jan-11 3,225.5FYTD %Feb-11 3,265.7Mar-11 3,973.8Apr-11 3,422.1May-11 3,152.2Jun-11 3,810.1Jul-11 3,757.6 Fiscal YearAug-11 4,245.8 42,107.5Sep-11 3,887.2YOY %IncreaseOct-11 3,811.813.46549754Increase14.5847021Nov-11 3,780.1FY todateDec-11 3,903.3 15,382.4Jan-121yr chg 19.5%AnnualCY05 41,955.3CY06 45,756.2CY07 48,992.8CY08 44,442.4CY09 34,792.6CY10 38,797.5CY11 44,235.2FYTD %Increase16.05241914Source: Comptroller of Public Accounts.2012 SPRING 39

More About AdverseAction Requirements:Did You Know That The Fair CreditReporting Act (FCRA) Applies To Your Hiring Practices?When required by the FCRA, notificationsto a job applicant must be donein two (2) separate and distinctive communications:In the Fall 2011 publicationof Dealers’ Choice magazine,your legal obligations undervarious Federal Lawswere pointed out in regardto obtaining a potentialcustomer’s credit.Did you know that one of those laws,The Fair Credit Reporting Act(“FCRA”), also has strict legal requirementsfor when you deny a job applicantemployment based in whole or inpart, on information found in third partysources, such as criminal records?The stated purpose of these Federallaws is to give so called consumers (notonly your customers, but also your job applicants)the right to see if the report youreceive from your background check providerhas information that is inaccurate.For example, if a criminal record showsyou information that you use, in wholeor in part, to take Adverse Action (nothire) a job applicant, you are required bythe FCRA to allow the applicant to see itso that they are given an opportunity todispute inaccuracies.The process is tedious and cumbersome,but is simply a part of the cost ofdoing business these days. Below is anexample of how you should be handlingthis FCRA requirement.• First, you must notify the job applicantthat you are taking “pre-adverse” actionand considering not hiring thembased in whole, or in part, on informationfound in public records (typicallycriminal history). You must also providea copy of that report showing theinformation found in public records aswell as a copy of that applicant’s Rightsunder the Fair Credit Reporting Act.The applicant must be given a “reasonabletime period” to contact whoeverprovided you with the information(typically your “background check”provider) and dispute the information.• Second, after a “reasonable time period”(we suggest 5-10 business days)you must provide to the job applicant yetanother notification in writing that youare now taking “adverse” action and nothiring them based in whole, or in part,on information found in public records.Of course, if the applicant is able todisprove or show the public record tobe inaccurate, and if there are no otherfactors or admissions that contributed toyour decision “not to hire” you shouldwithdraw your “adverse” decision not tohire that person. Located in Houston, The Cole Group has been inbusiness since 1973 and provides job applicantscreening for over 800 auto dealerships. If you area Cole Group client, or simply a dealer concernedabout your obligations under the law, please donot hesitate to contact The Cole Group concerningthis issue or any others, www.thecolegroup.comor 1.800.232.560240

REACH YOURTARGET AUDIENCEAFFORDABLYFind out how targeted advertising can producereal, measurable results for your organization.ADVERTISE ANDGET RESULTSDon F. Brown, Advertising Sales8013-746-4003don@spectruminkpublishing.com2012 SPRING 41

TADA Advertiser Index Spring 2012AttorneyCounts & Bonacci, LLP. ..........................................................Page 34Johnson, Deluca, Kurisky & Gould, P.C. ..............................Page 30Wm. David Coffey, III & Associates ..................................... Page 44Automobile TrainingFirst Innovations, Inc. ............................................................Page 15Banking/FinanceBank of America/Merrill Lynch ..............................................Page 9Construction ManagementTeal Construction Company .................................................Page 18The Ratliff Group, LLC .............................................................Page 5Dealership Buy-SellsDick Nokes Consulting, LLC .................................................Page 29Dealership Management SystemsAuto/Mate ® Dealership Solutions ...................................... Page 42Dealership ValuationsRichard W. Nokes, P.C., CPA,ABV ........................................Page 29Finance & Insurance DevelopmentFirst Innovations, Inc. ............................................................Page 15Profit Concepts Management, Inc. ......................................Page 31F&I Training/ProductsAmerican Financial & AutomotiveServices, Inc. ........................................................Page 35 & Page 43Foresight Services Group .......................................................Page 3InsuranceAmerican Fidelity Assurance ................................................Page 22Federated Insurance ..............................................................Page 38Sentry Insurance ....................................................................Page 32Texas Mutual Insurance Co. .................................................Page 26Texas Auto Dealers Self Insurers Group .............................Page 11Zurich American Insurance Company .................................Page 28Sales TrainingForesight Services Group .......................................................Page 3Service ContractFirst Innovations, Inc. ............................................................Page 15Transportation/InternetShipCarsNow ...........................................................................Page 6Uniforms & Facility ServicesUniFirst ....................................................................................Page 21Utility ConsultantAPPI ...........................................................................................Page 2Web-Based MarketingactivEngage ............................................................................Page 1142

Your Next Stop - New Profit“Turn-Key” Personal Lines Insurance AgencyNew Profit CenterIncrease Your CSIMaximize Customer Loyalty

Texas Automobile Dealers Association1108 Lavaca, Suite #800Austin, TX 78701PRSRT STDU.S. POSTAGEPAIDSALT LAKE CITY, UTPERMIT NO. 508THIS MAGAZINE IS DESIGNED AND PUBLISHED BY MEDIA COMMUNICATIONS GROUP | 801.746.4003PROVIDINGLEGALSERVICES TOAUTOMOBILEDEALERSWm. David Coffey, III & Associates has specializedin representing franchised new motor vehicledealers in civil and regulatory proceedings againstmanufacturers and distributors for over 25 years.[t] 512.328.6612 | [f] 512.328.7523e-mail: info@wdcoffeylaw.com13810 FM 1826 | Austin, TX 78737www.wdcoffeylaw.comWm. David Coffey, IIIBoard Certi ed Administrative LawTexas Board of Legal SpecializationWM. DAVID COFFEY, III& ASSOCIATES