In this Issue:Planning for Change in the Electric Industry

Titling the California CarBusiness Succession Planning

Volume 3 Spring 2008

PAAutomotive is published twice a year by PAA Services, Inc., a subsidiary of the Pennsylvania Automotive Association (PAA). PAA represents the more than 1,100 franchised new car and truck dealers in Pennsylvania. Founded in 1919 as the Interstate Auto Dealers Association and incorporated in 1921 as the PAA, the Association supports its membership through legislative and industry representation, educational programs, community relations and charitable activities. It also provides its members with title service, insurance and competitive dealer purchasing services.

PAAutomotive is the official publication of PAA. Subscriptions are free to all PAA members. Additional copies are available to members at a rate of $15 per issue or $25 per year. Non-member subscriptions are available for $40 per year.

EditorialThe opinions expressed by authors other than PAA staff and officers are the responsibility of the authors only and not necessarily those of PAA, PAA Services, or its members. PAA members may reproduce the non-commercial part of this publication with verbal permission from the editor. All others must receive written permission from the editor prior to reproduction of any part of this publication. Questions and comments should be addressed to the editor. PAA and PAA Services, Inc., as a matter of policy do not endorse either the products or services offered by any outside advertiser and cannot be responsible for any statements or representation made by any outside advertiser as part of PAAutomotive Magazine. Copyright©2008 PAA Services, Inc. All Rights Reserved.

PAAutomotive STAFFPaul McMillen, President

pmcmillen@paa.org

Melanie Bible, Editormbible@paa.org

Mark Jewett, Sales Director/Distributionmark.jewett@paa.org

Annette Oyler, Graphic Design/Print Manageraoyler@paa.org

Editorial requests or questions should be sent to Melanie Bible at (717) 255-8311, ext. 3327mbible@paa.org

Mailing address:PAAutomotive Magazinec/o Pennsylvania Automotive AssociationP.O. Box 2955Harrisburg, PA 17105-2955

Advertising:Contact Mark Jewett at (717) 255-8320, ext. 3360or mark.jewett@paa.org for rate information.

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Chairman’s CornerBy Michael B. Smith, 2008 PAA Chairman

The Electorate Speaks 2008By Mark Stine

NADA Update

Minimum Wage and OvertimeComplianceBy Chad Marsar, Esq.

Titling the California CarBy Don Busey

Navigating the Family BusinessBy John Devlin and Melanie Bible

Planning for Change in the Electric IndustryHow Much Will You PayBy Susan Bruce and Vicki Karandrikas

Supplying Future Employees with Tools For SuccessBy Melanie Bible

Is It Time To Think About Business Succession PlanningBy Robert J. Murphy, CPA, CVA

PAA 2008 Fall Conference

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PAA Officers

Chairman ..............................................Michael B. SmithVice Chairman ........................................Fred S. SavageImmediate Past Chairman ................ George G. BensonTreasurer .......................................Allan E. Jennings, Jr.Secretary ...............................................Gregg A. Semel

Directors-At-Large

ADAGP President..................................Scott LustgartenGPADA President...................................Michael WolcottNADA Director, East PA.........................David B. PenskeNADA Director, West PA................Clarence B. Smail, Jr.PTD Chairman...........................................Robert Dwyer

Board of Directors

George G. Benson Jeffrey A. Berger Robert E. Cochran Raymond Cole Dominic M. Conicelli Matthew DePrimo Thomas A. DottsBill Egan James J. Fiore Mark E. Fox John W. GiambalvoMichael GrataEarl B. Hoffman, Jr.Allan E. Jennings, Jr.William S. Kelly, Sr.William S. LakeRobert A. LefflerRobert LewisTed Loughead

ADVERTISING INDEX SPRING 2008

Larry L. NewJames A. PerutoFrederick J. PeruzziJames PhillipsRick R. QuigleyFrederick W. RentschlerFred S. SavageAndrew M. ScottDuke ScottGregg A. SemelJames A. SmailMichael B. SmithGene Stocker, Jr.Todd P. StoltzJoseph A. StraubJohn H. SutliffJoseph E. Thurby, Jr.Mitchell J. UnisDane Whitmoyer

Executive StaffJ. Paul McMillen, jmcmillen@paa.org President

John Devlin, jdevlin@paa.org Vice President, Chief Operating Officer

Bill Hicks, bhicks@paa.org Vice President, Finance & Human Resources

Anne Shuman, ashuman@paa.org Vice President, Foundation

Mark Stine, mstine@paa.org Vice President, Legislative & Public Affairs

Thomas Sworen, tsworen@paa.org Vice President, Chief Technical Officer

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American Fidelity Assurance Co. Page 9

Boyer & Ritter Page 15

Daniel Ferrari & Co., P.C. Page 30

Dilworth Law Page 6

EMI Page 13

FDI Collateral Management Page 12

Federated Insurance Page 28

Guardian Warranty Corporation Inside Front Cover

McNees Wallace & Nurick LLC Page 21

North East Pa Auto Auction Inc. Page 29

Premium Productions Page 4

Protective Page 25

Sovereign Bank Page 30

Third Lot.com Page 30

Wurth USA Inside Back Cover

Zurich Page 6

CornerDear Colleague:

As the 2008 PAA Chairman, it is exciting to have the opportunity to address all of you in PAAutomotive Magazine.

A rather new publication, this magazine is constantly growing and changing. Each issue, however, strives to provide information from industry experts and skilled professionals. The writers seek to elaborate on the concerns that matter most to dealers and give an in-depth look at the topics that affect each and every one of us.

As many of you know, PAA and I have been hosting several Regional Meetings throughout the state to discuss industry, legislative, and compliance issues facing dealer members. In addition to providing a forum for dealer discussions, it is our hope that these meetings will connect PAA to the dealer community and will provide us with an opportunity to better communicate the Association’s efforts. The upcoming meeting dates include: • April 23, 2008, following the Auto

Dealers Association of Greater Philadelphia meeting at ADAGP headquarters. The meeting starts at 1 p.m. following lunch.

• April 24, 2008, in the Harrisburg area at the West Shore Country Club in Camp Hill. The meeting will start at 9 a.m. following breakfast.

• May 7, 2008, at The Woodlands in Wilkes-Barre. The meeting will start at 6 p.m. following hors D’oeuvres.

• May 8, 2008, at 10:00 a.m. at The Best Western in Bethlehem, prior to the Greater Lehigh Valley Auto Association meeting and lunch.

Dealers who have not yet registered and plan to attend should contact PAA as soon as possible.

In addition to the Regional Meetings, PAA, with the assistance of the PAA Foundation, will offer a series of seminars throughout the state on increasing profitability in the dealership. It is our hope that the seminars will help dealers during these difficult economic times.

Included in this publication is also information on the 2008

Call Amy Shuman at 1-800-242-3745 ext. 3349 to make your reservation

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Fall Conference. This year’s Fall Conference, to be held October 15-19 at the Ritz-Carlton in Naples, Florida, is not only a great networking opportunity in a beautiful location, but also an educational and inspirational trip. Speakers for this year’s business session include Connie Podesta, Chris Buckley, Jim Ziegler. Jim Lentz, President of Toyota Motor Sales, has also been invited to attend. I am proud to promote this event and look forward to seeing you all there. Sincerely,

Michael B. SmithChairman, Pennsylvania Automotive AssociationPresident, Laurel Automotive Group, Johnstown

Chairman’s

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The Electorate Speaks

By Mark Stine, Vice President, Legislative & Public Affairs

The uncertainty and implications of the election season are once again upon us. Historically, election contests are viewed as regional affairs in which the record of the candidates involved is the primary factor dictating the success or failure of those seeking election, or in most cases re-election.

In Pennsylvania however, statewide disaffection for the state legislature, resulting from popular perceptions of the General Assembly being a self-serving institution more concerned with their own salary levels than serving the public, resulted in a far from typical outcome in 2006.

Specifically, an unabated reform movement resulted in the defeat of 17 incumbent legislators in the last primary election as well as seven seated members in the 2006 general election. Additionally, given the anticipated backlash of voter discontent, 30 legislators decided to retire rather than face the electorate. With incumbent retention typically approaching 100 percent, such a development foretold a new era in Pennsylvania electoral politics.

Nationally, traditional political party establishments have been fractured by disagreement over divisive issues and the absence of consensus has resulted in wounds that are slow in

healing. It is not coincidental that candidates such as John McCain and Barack Obama have ridden the populist wave and leapt to the forefront over candidates initially anointed by their respective party leaderships. Such a development sets the stage for a presidential election that is fundamentally dissimilar to those of the recent past. As such, the political pundits who typically are credited with being all-knowing have been proven wrong at every stage of the process (for example, as recently as January of this year John McCain’s cash-strapped campaign was expected to hit its high water mark in the New Hampshire primary after which he would bow out. Also, it was anticipated that Hillary Clinton’s Democratic Party convention would be lacking in drama, and it was being dismissed as a boring coronation ceremony – wrong.)

Pennsylvania State SenateWhile in 2006 the State Senate lost its top two leaders, the ratio between Republicans and Democrats in the chamber remained the same. Because of the size of senate districts, it is not anticipated that the 29 – 21 seat balance of power will significantly change as a result of this year’s contests. While both parties have their eyes set on one or two potentially vulnerable candidates as possible “pick-up” seats, it is unlikely that enough of these opportunities exist to alter the existing Republican

majority. In fact, 20 percent of the Senators seeking re-election face no opposition at all. Perhaps the most significant development for the Senate will be the departure of long-time power broker and Democrat Appropriations Chairman Vincent Fumo (D-Philadelphia). A key ally of Governor Rendell and architect of the budget agreements and other major controversial initiatives (like the gaming law) for the last generation, Senator Fumo decided to not seek re-election in 2008 – presumably allowing him more time to prepare his defense against the 139 felony counts brought against him by the U.S. Department of Justice.

Pennsylvania House of Representatives

In contrast to the State Senate, the House of Representatives did experience a change in majority in 2006. Democrats enjoyed a one seat plurality this session although such a slim margin proved tenuous at best. On numerous occasions this year, the majority party scheduled controversial initiatives for floor votes, expecting to impose their will over their Republican counterparts, only to have to recess quickly when it was determined that all of their members weren’t present to vote – or occasionally, even in Harrisburg.

The enthusiasm of the electorate for eliminating incumbents solely because they happen to be incumbents appears

2008

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NADA Update

New legislation in the House and Senate is threatening the fuel-economy compromise that dealers successfully fought for over the summer. Both measures (H.R. 5560 and S. 2555) seek to overturn the Environmental Protection Agency’s decision to deny California’s request to adopt its own more stringent tailpipe emissions standards. The California standard is estimated to have a Corporate Average Fuel Economy (CAFE) equivalent of as much as 49.1 mpg by 2020. It would supersede the aggressive but reasonable fuel economy standard signed into law last year that calls for a fleet-wide average of 35 mpg by 2020. If congress approves these new measures, 16 other states representing half of the U.S. vehicle market have said that they would adopt the California standard, creating a confusing patchwork of regulations for dealers and manufacturers.

NADA fully supports EPA’s recognition that any regulation of motor vehicle greenhouse gasses should be done at the federal, not state, level. By acknowledging the global nature of greenhouse gases, EPA correctly determined that no “compelling and extraordinary” conditions exist to warrant approval of California’s motor vehicle greenhouse gas standards.

NADA’s Legislative Affairs office encourages dealers to contact their Senators and Representative to urge them to oppose S. 2555 and H.R. 5560.

Bud SmailDavid Penske

to have abated somewhat though. Of the 102 seats the Democrats are defending, 43 have no opposition whatsoever. Additionally, 13 Democrat members face only primary opposition and therefore will have no opponent in November. Similarly, the Republicans are defending 101 seats. 44 of these seats are completely unopposed, and five Republicans are only facing opponents in the primary election. This development is in marked contrast to 2006 when over a quarter of the General Assembly was replaced – including long-standing leaders from both parties.

This year, the key races that will determine which party will run the House will be the 19 seats that are opening due to retirements. While popular discontent has provided a broader pool of individuals seeking change, the rhetoric associated with such efforts has in some cases made running for and holding public office less desirable. Ironically, several of the retirements this year are “reform” candidates from 2006 who came to Harrisburg only to discover that their sweeping promises and vows to bring change to state government were either frustrated or, more likely, impractical.

Office of Attorney GeneralPerhaps the most important election this year for Pennsylvania dealers is the Attorney General race. The incumbent, Tom Corbett, was elected in 2004 and won by 99,000 votes (less than two percent of votes cast). Since the Attorney General became an elected office in 1980, Republicans have always held the office. The Attorney General election contests have always been extremely close, however, and the winning vote percentage is typically within one or two points.

The explanation for the closeness of these races lies not with the individual

candidates that have sought the office over the years but with voter registration statistics in Pennsylvania. While until recently Pennsylvania experienced a Republican stronghold on many elective offices, the Commonwealth has always had the majority of its voters registered as Democrats. A significant factor which could prove problematic for Corbett’s re-election aspirations is this registration disparity. Additionally, because of the electorate being energized by the Democratic presidential primary, the Pennsylvania Republican registration deficit was recently exacerbated by the 111,000 Pennsylvanians who registered as Democrats since January of this year alone.

November 2008

As we’ve experienced, while circumstances, candidates, cyclical voting trends and electorate priorities are continuously changing, one thing is constant. Electoral politics, while sometimes characterized as always being local, are more clearly defined as being simple mathematics. The 2008 elections will not be decided by the numbers of those registered to vote, but rather on the numbers that actually do vote. What remains are the messages put forth by the individual candidates to encourage that act and their ability to communicate, and make resonant, that message.

Continued from page 7

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FLSA and PMWA Minimum Wage Increases

Effective January 1, 2007, Pennsylvania’s minimum wage increased from $5.15 to $6.25 per hour, and has further increased to $7.15 per hour effective July 1, 2007, under amendments to the PMWA. There is a pro-small employer provision which currently allows employers with ten or fewer full-time employees to pay $6.65 per hour until July 1, 2008, when the minimum wage for small employers increases to $7.15.

The Fair Labor Standards Act (FLSA) was amended to increase the federal minimum wage in three steps: on July 24, 2007, the federal minimum wage increased from $5.15 to $5.85; then on July 24, 2008, to $6.55; then on July 24, 2009, to $7.25.

The amendments to the PMWA make the Pennsylvania minimum wage higher than the federal FLSA until July 24, 2009, when the federal minimum wage increases to $7.25. The wage that is more favorable to the employee, whether federal or state law, must be paid. This means all dealerships in Pennsylvania with more than 10 full-time employees must currently pay employees at least $7.15 per hour. The overtime provision of the FLSA states that any hours worked in excess of 40 hours in a seven day workweek must be paid at a rate of not less than one and

Dealerships have a wide variety of jobs and pay plans to take into consideration when evaluating compliance with minimum wage and overtime rules. Before evaluating the dealership for compliance with minimum wage and overtime standards, you need to understand the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA).

By Chad Marsar, Esq. General Counsel

Minimum Wageand

Overtime Compliance

one-half times the employee’s regular rate of pay. Therefore, employees that make minimum wage must receive at least $10.73 per hour for any hours worked in excess of 40 hours in a seven day workweek.

Overtime ExemptionsWhere minimum wage and overtime compliance becomes difficult is applying the various exemptions to these rules to the variety of jobs within a dealership. The rules allow a dealership to classify certain jobs as “exempt” from overtime. Failure to properly classify dealership employees as exempt from overtime can result in Department of Labor (DOL) audits and lawsuits.

There are several exemptions from overtime (not minimum wage) that will apply to dealerships. The exemptions that are specific to dealerships are the salesmen, partsmen, and mechanic exemption. For one of these exemptions to apply, the employee must spend at least 50% of their time performing specified duties. The other general exemptions from overtime which may apply to a dealership are the commissioned, executive, administrative, professional and computer employee exemption.

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SalespersonFor a Salesperson to be exempt from overtime, they must be employed for the purpose of and are primarily engaged in making sales or obtaining orders or contracts for the sale of automobiles, trailers or trucks. Work performed incidental to and in conjunction with a salesperson’s sales or solicitations (i.e. deliveries and collections) fall within this exemption. In addition, service writers, service advisors, assistant service managers or service salesmen, who record the condition of vehicles and write up reports indicating the parts and mechanical work needed, qualify if the majority of their sales are for non-warranty work.

PartsmenThe second exemption is for parts department workers. For parts department workers to be exempt from overtime they must order, stock, pull and sell parts. Parts delivery people do not qualify for this exemption.

MechanicsThe next exemption applies to mechanics. For mechanics to be exempt from overtime they must perform skilled mechanical work, such as service, reconditioning and body shop mechanics. Activities not considered mechanical are painting, cleaning, polishing, tire changing and lubrication.

Commissioned EmployeesThe commissioned employee exemption applies to commissioned employees who are compensated by commission for either sales made or services performed. The employee’s regular rate of pay must exceed 150% of the applicable minimum hourly rate. Also, more than half of the employee’s compensation for a period not less than one month must derive from commissions on goods or services.

Salaried EmployeesFor the last four exemptions from overtime: executive, administrative, professional and computer exemption the following rules apply:

(1) The minimum salary requirement must be $23,660 ($455 per week), meaning those who make under $23,660 annually do not qualify; and

(2) The rules only pertain to salaried workers.

Administrative employee exemption applies to individuals who: • engage in office or non-manual labor directly related to the management or general business operations of the dealership or its customers; and • use discretion and independent judgment regarding matters of significance. Activities related to dealership management or general business operations include:

operations financing, accounting, budgeting, auditing, insurance, purchasing procurement, advertising, marketing, safety/health, personnel management, computer, internet and database administration, legal and regulatory compliance, etc.

This exemption typically applies to dealership assistant departmental managers, office managers, and human resource personnel. This exemption typically does not apply to clerks, lot boys, cashiers, secretaries or those whose main duties involve bookkeeping, payroll preparation, sending out monthly statements of account or routine clerical duties.

Executive employee exemption applies to individuals who: • Manage an enterprise (i.e., dealership), or a recognized

department of an enterprise; • regularly direct the work of two or more employees;

and • have the authority to hire or fire employees (or their

recommendations as to hiring or firing employees are given great weight).

This often applies to dealers, dealership department managers and shop foremen.

Learned Professional employee exemption applies to individuals who: • Perform work requiring advanced knowledge in a

field of science or learning, customarily acquired by a prolonged course of specialized intellectual instruction.

This typically applies to in-house dealership attorneys and accountants, but not accounting clerks or bookkeepers.

Computer employee exemption applies to individuals who are:• Compensated $455 a week salary or at a rate no less

than $27.63 per hour for each hour worked, and is engaged in at least one of the following:

(1) the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional applications; or

(2) the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or

(3) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

(Continued on page 12)

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Dealerships should review your pay practices and classifications of employees to determine if you are in compliance with the FLSA and PMWA overtime and minimum wage rules.

Dealers should also review employees’ job duties and written job descriptions to ensure they involve the use of discretion and independent judgment regarding matters of significance. An employee who simply applies protocols or provisions from a manual on a case-by-case basis may not be exempt from overtime.

By determining if your dealership is in compliance before complaints arise, you can limit your exposure to DOL audits and litigation.

Minimum Wage and Overtime Compliance

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PAA Services, Inc.

Contact Allison Mitchell to receive the ELT Agreement Packet.

1-800-242-3745 ext. 3361 amitchell@paa.org

PennDOT’s Electronic Lien and Title ProgramSIGN UP NOW FOR

Mandatory Participation for all Lien Holders effective July 10, 2008

PAA Partnership with FDI Collateral Management

• No Set-Up Fee• No Monthly Minimum• Web-Based Program• Free Training • Customer Support through PAA

and FDI

$4.00 Members $5.00 Non-Members (per Lien Recorded)

PennDOT’s ELT Program

• Anyoneengaged infinancingandholdingliensonvehiclesinPAmustparticipate.

• Participation is required even if financingorholdingliensisdoneonalimitedbasis

• Must have anELTnumber assignedbyJuly10,2008,inorder to continuetofinanceandholdliensinPA.

4) a combination of the duties 1-3, the performance of which requires the same level of skills.

Highly Compensated employee exemption applies to individuals who: • Perform office or non-manual work and are paid a total annual compensation of $100,000 or more, (which must include at least $455 per week); and • regularly perform at least one of the duties of an exempt executive, administrative or professional employee. This applies to most “white collar” dealership employees earning over $100,000.

Collateral Management

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This reassignment form will allow the dealer to sell and assign the vehicle to an out-of-state customer or dealer in a state not requiring California emissions standards. There are exemptions that apply to the California emissions standards, including any vehicle that has over 7500 miles or has a gross vehicle weight rating (GVWR) of greater than 8500 lbs. However, if the traded vehicle does not meet any of the exemption requirements, the reassignment form would need to be utilized. States that currently have multiple reassignments on titles would not be required to use the form since they already enable the dealership to reassign the back of the title to an out-of-state customer or dealer.

The procedures for use of the MV-DR form are:

2. If the vehicle being traded from out-of state is a California emissions vehicle, the dealer would be required to obtain a dealer title within 20 days of trade. The reassignment form is not utilized for a vehicle that meets California emissions standards.

3. If the vehicle being traded from out-of-state does not meet California emissions standards then the title would be assigned on the back to the dealership and within 20 days the dealer must sell the vehicle out-of-state to a customer or another dealer using the reassignment form. This would only apply to vehicles that have only one reassignment on the back of the title, not allowing for other reassignments to occur. The exemptions to the rule would be if the vehicle being traded had more than 7500 miles or a GVWR greater than 8500 pounds. If the exemptions apply, then a PA title can be applied for by the dealership without use of the MV-DR Form.

4. The reassignment form is a 3-part document that is numerically numbered for tracking purposes. The top copy, on secure paper, must stay with the original title of the vehicle being sold to the out-of-state resident or dealer. The second copy will be the dealer’s copy, which must be maintained for 5 years. The third copy should be submitted to PAA with a copy of the assigned out-of-state title within 20 days of sale.

The reassignment forms, in packages of five, can be purchased from PAA for $25.00 ($33.00 non-members) plus shipping and handling. This price includes the 5-Year Archiving as required by law. Forms are archived and stored at PAA Headquarters.

Form MV-DR

By Don Busey, Director, PAA Training & Compliance

Pennsylvania has implemented a dealer reassignment form to be used when vehicles are being traded in from an out-of-state customer with a title that has only one reassignment space. The reassignment form was created for vehicles that do not meet California emissions standards. Before, if you traded a vehicle in from any state with one reassignment space on the title and the vehicle did not meet California emissions standards, the dealership could not title the trade. Form MV-DR allows dealers to reassign the vehicle to an out-of-state customer or dealer in a non-California compliant state.

1. The reassignment form can only be used by a licensed Pennsylvania dealer for the purpose of reassigning an out-of-state titled non-California emissions vehicle with less than 7500 miles and a GVWR rating of less than 8500 pounds that was acquired through a trade-in from a non-dealer (out-of-state title must be attached). This form cannot be used to transfer a vehicle to another Pennsylvania dealer or resident.

CAR

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Steve Covey’s 8 Habits for Effectiveness and

Greatness

1. Be Proactive.

2. Begin with the End in Mind.

3. Put First Things First.

4. Think Win/Win.

5. Seek First to Understand, Then to be Understood.

6. Synergize Creative Cooperation.

7. Balance Self-Renewal.

8. Find your Voice.

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By John Devlin and Melanie Bible

Over fifteen million copies of Steven Covey’s Book The 7 Habits of Highly Effective People have been sold in the past three years; so many that he went on to write a second book, The 8th Habit from Effectiveness to Greatness. Swarms of businessmen and entrepreneurs have purchased these books, searching for ways to bolster their success.

But the information that is provided in Covey’s chapters, despite the insightful ways in which it is presented, is not new. Instead, themes of empowerment, communication, and respect are woven together to explain the importance of business relationships.

The underlying assumption is

that the individuals who succeed in business are the ones who are best able to merge these ideas, who have the ability to see outside their own ambitions and look at what is best for the company.

Respect for others, matched with good communication and a shared goal, provides a foundation for success in any industry. Nowhere is this more evident than in the family business. Only one in three family-owned businesses survives into the second generation and just one in eight into the third. The reasons? Typically, problems that lead to the eventual demise of the family business include transferring business control from the older generation to the younger, the failure to work together, or simple lack of communication. Those of us who have been at the Association for some time have seen dealerships both flourish and succumb to the ups and downs of running a family business. With that in mind, we set out to glean some insight from dealers and their family members about the secrets to surviving the family business. We interviewed two family dealerships, Smail Auto Group and Hunter’s Truck Sales, who have several generations of the same family working together in the hope of better understanding how these families are effective and succeed.

Smail Auto GroupBrothers Bud and Jim Smail were influenced in their passion for the automobile business by their father, Clarence B. Smail, Sr. Today the family owns Smail Auto Group in Western Pennsylvania and has new car franchises with Acura, Honda, Mercedes-Benz, Pontiac, Cadillac, GMC, Mazda, Lincoln, Mercury, and Kia. With third and fourth generations joining in at the dealership, it is easy to see that the Smail family is successfully navigating the family business.

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How are important decisions made at your dealerships?Jim: Sometimes, we have very little input in a decision. [In a recent computer system purchase,] we had our people look at the products on the market and tell us what the best product was. It came down to what systems they

time on the showroom floor selling. I just think it is so important to be in the trenches. It would be easy for me to say to my grandson, ‘well, here is your office, start running the company,’ but I wouldn’t do that. I would have him sell for two or three years.

Is there a secret to keeping harmony among different generations and segments of the family?Jim: Over the years, whether it is 50 years, 40 years or whatever, that we have been doing this together, I could count maybe on three or four fingers the amount of times where we have really locked heads over an issue. It just doesn’t happen. The reality is we are here to make it work. The common interest is to be successful with the dealerships, to take care of our employees and our customers to a very high level. Also, to a great degree, the

way we were raised by our parents. There really shouldn’t be anything that we cannot solve.

Bud: We have family meetings where everyone is involved. We sit around the table. When there are questions that the kids have, that my wife may have or Jim’s wife may have, now is the time to get them answered.

So you have meetings with not only the people who are involved in the day to day operations of the dealership but the whole family?

Bud: Yes, we have one maybe two of these a year where we try to explain business issues to them. For example, I have a daughter who isn’t involved in the business but she is invited to come along so she is aware of what is going on.

And at the dealership, specifically, how do you get

“Our experience confirms that families who have been willing to address apparent issues and who are conscious of the need to maintain a prudent balance

between family acceptance and business accountability

have achieved the most success transferring their business from

generation to generation.” -David Ciambella, The Rawls Group

Jim Smail

liked the best since they would be the ones using them on a day to day basis.

Bud: We are looking at another store in our town right now. In a case like that, we get input from our three general managers, two of them are my sons. We have key people sit in on the discussion, and we throw out the numbers that are being kicked around. It isn’t Jim and I sitting around saying, ‘okay let’s do it,’ we get the input from the people involved.

What mistake taught you the most?Jim: Back in the 80s, we embarked on quite an expansion. The biggest mistake was that we didn’t have enough people, qualified people, to really carry that out. You have to have—in this business today more than any time, because of the changes in the industry, the technology that is involved that has empowered the consumer—you must have quality people to operate this very sophisticated business. If the people you surround yourself with are motivated and look forward every day to coming into work, then you have a real shot…as long as you give them the proper tools and pay them, very well, in order to help you win, to help you succeed. As the industry consolidates as far as the number of dealerships, the most important thing is having the right people representing you and your products and doing everything they can to make a good impression in the community.

What is one piece of advice you wish you were given when you first started or what advice would you give?Bud: One thing that for myself, and Jim, and my two sons that we have done, that my grandson—he’s going to college and will work in the summer—that they spend some

Bud Smail

everyone on the same track?Jim: It’s all about communication. If people are made aware of the things that are going through my mind, and I communicate that to them, that’s important. If they don’t know what my expectation level is, or Bud’s expectation level is, they can’t do their jobs properly. You

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can’t hold people accountable unless you communicate, so even with our own families we have to be able to communicate. Sometimes we are accused of having a meeting just to have a meeting, but more often than not we bring people together to discuss something that could be vitally important in a particular area of the business and to get everyone’s input.

Bud: I think everyone, whether you’re a lot attendant or a parts manager, service manager, wants to be kept informed.

Do you have a mechanism for settling disputes?Bud: It has never come to that. If we can’t sit down and talk out a problem, shame on us.

Hunter’s Truck SalesLike Bud and Jim Smail, Harry and Bob Hunter joined their father as his business grew from a small service station, which he opened in 1938, to Hunter’s Truck Sales, a company that now spans 15 locations and employs 625 employees. With the third generation taking on more of the management responsibilities, and the fourth generation just entering the business, the Hunter family is another example of a successful family business.

How are important decisions made at your dealership?Bob: When Harry and I joined our father at the dealership, he treated us as an equal right from the start. He taught

us how to make decisions. He played a game with us. Whether your talking about the number of trucks to order for stock or how much to give a guy for a trade, he would have you write down the number on a slip and then you’d lay it down upon the desk. The reason he did this was, if you were way out of line, you then had a chance to explain how you got that number. He’d teach you how to make important decisions. I was 27 and Harry was 31 when we started running the dealership because my mother died and Dad actually left the business for a year. When he came back, he looked at us and said ‘You know, I’d rather sell trucks than run this place.’ Then, the three of us ran it. And if two of us thought one way and one of us didn’t the odd man out would, maybe try to convince the other two, or would go along with the majority. In the end, everyone

Family owned and operated for over 72 years, Smail Auto Group has grown to include ten new car franchises, including Acura, Honda, Mercedes-Benz, Pontiac, Cadillac, GMC, Mazda, Lincoln, Mercury, and Kia. In addition, there are five service and parts centers, an auto body and collision center, an auto glass repair and replacement center, and two professional detail centers. Smail Auto Group has over 350 dedicated professionals committed to providing customer service.

Clarence B. Smail Sr. had a passion for the automobile business. In 1959, Bud Jr. returned from the University of Maryland to join his father at the Lincoln Mercury dealership in Jeanette. Jim Smail joined the company in 1969. He was instrumental in the 1972 acquisition of the Honda and Yamaha Motorcycle franchises. In 1980, their brother Bill Smail came to the company, and by the mid 1980s, another generation had joined the family business with both of Bud’s sons working

at the dealerships. The 1980s saw growth for the business, too. The brothers acquired Pontiac-Cadillac-Mercedes-Benz, Mazda, Isuzu, and Acura franchises. The company has received many awards throughout the years, including the Acura Precision Team Award, Mercedes-Benz “Best of the Best” Award, Mazda Winners Circle Award, and the Honda President’s Award. All six of the stores are located along Route 30 in Greensburg.

Pictured above: Just one of Smail Auto Group’s Dealerships

Smail Auto Group

Bob Hunter

simply tried as hard as they could to make things work. So everyone was given their chance to make their case and then they learned through the process?Bob: Yes, and the best part of all is that Harry and I never realized we were being taught. We

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thought we were doing everything and never even realized we were being led. When Harry and I started bringing in the next generation, we realized how hard it was to keep your hands off. To say ‘here is your job, you do it, and you’re going to be held responsible for it.’ To be able to let them make mistakes, even when you knew they were mistakes, so that they could learn from it…We had a hard act to follow. We put them in the operating positions. For example, Jeff is in charge of distribution, Dave is in charge of parts, service, and the body shop, and Bill is in charge of all the credit, F & I, legal and insurance. I said to every one of them, ‘you are in charge of your area, I will give you advice but I won’t make the decision for you.’ For the last three years, they have been operating the company.

What mistake taught you the most?Bob: Not seeing an advantage where there was one. When International stopped making scouts and pick-ups, we thought it was the biggest disaster because we had set up separate operations for the scouts and pick-ups. We were the largest scout dealer in the northeast. We had separate mechanics, separate parts guys. We understood it was a different business than the medium and heavy business. I guess what we learned was that sometimes when you think something is the worst thing it can actually turn out to be the best. We actually found that when we got out of that business and started concentrating on one thing we did so much better. We found out we were spending ninety percent of our efforts on scouts and pick-ups which were only generating ten percent of the profits.

What is one piece of advice you wish you were given when you first started or what advice would you give?Bob: Politics and conflict exist everywhere, not just in family businesses, and you have to learn to work through them. A family business has different problems but a lot more opportunities. Everyone has to want to make it work. The important thing to realize is that there are a lot things that happen in a family business that if you hadn’t worked anywhere else you’d think, ‘well, there isn’t all this politics anywhere else, or troubling family relationships.’ Harry and I probably had the most trouble when Dad wasn’t around in the business and when we went to our second location. All of a sudden Harry and I weren’t together all the time, we couldn’t discuss everything, and we had to adapt to the changes. Even though we had some rough times going through this, we both realized that we were much better together than we were separate. It is like a marriage; you have some rough spots in it but you have to back down

sometimes and look at what the good side and the bad side is. I am 100% in favor of family businesses but that doesn’t mean everyone should be in them.

Is there an effective way to encourage team work over individual achievement?Bob: They are all very competitive. What we keep telling them is ‘you have to act like an owner. Don’t just look at your own department or job. You have to do what is best for the whole company.’

Both the Smails and Hunters show that communication and respect, combined with the ability to do what is best for the company, are the key elements to making a family business successful. Industry experts agree. David J. Ciambella from The Rawls Group opined, “Our experience confirms that families who have been willing to address apparent issues and who are conscious of the need to maintain a prudent balance between family acceptance and business accountability have achieved the most success transferring their business from generation to generation.” And certainly Steven Covey’s habits for effectiveness and greatness can be seen throughout Bud and Jim Smail’s and Bob Hunter’s answers.

In 1938, Homer Hunter, who grew up on a dairy farm, opened a small service station in the rural town of Eau Claire. The business grew to include tires and trucks, and during World War II Hunter became a subdealer for Mack Trucks. They began selling Federal and other used trucks. In 1950, International Truck awarded Hunter a new truck franchise, and in 1983 Peterbilt took notice of Hunter’s progress and awarded a Peterbilt franchise. As the company grew, so did the number of family members in the business. Harry, the oldest son, joined Homer in 1960. Bob soon followed in 1963. Together,

the father and sons worked to promote the growth of the business. In 1982, the company opened a body shop and leasing facility in Butler, and two years later opened a full dealership. The company’s growth continued in the 1990s as additional dealerships were built in surrounding areas. Today, the company is in the hands of the third generation of Hunters. A tribute to Homer’s enduring legacy of teamwork, trust and accountability, Homer’s grandchildren, David, Jeffrey, William and Nancy, operate a company that now spans fifteen locations and employs 625 individuals.

Hunter’s Truck Sales

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While dealerships have had to grapple with the impact of increasing fuel prices in recent years on their businesses, a new energy issue is on the horizon for all Pennsylvania businesses that will also affect car and truck dealerships.

n the coming years, Pennsylvania businesses will experience dramatic price increases for their electric supply and fundamental changes in how they purchase their electric supply.

These price increases are expected as long-term electric rate caps expire and Pennsylvania transitions into an era in which the terms and conditions for electric supply are no longer directly regulated.

Once rate caps expire, the obligation shifts to businesses to secure the optimal electric product and pricing from the market. With these

fundamental changes fast approaching, now is the time for Pennsylvania dealers to begin preparing by understanding the impact of electric supply price increases, factoring those increases in their budgeting and business planning and developing a strategy to deal with the change. Those dealers that understand the issues and plan now for the change may find a competitive advantage.

Dealers should be prepared for significant electric price increases when rate caps expire. Significant spikes in electric rates have occurred where caps have expired in other states as well as in areas of Pennsylvania where rate caps have already expired, such as in Pike County and Western Pennsylvania. Some predict that rate cap expiration for customers in PPL’s service territory in 2010 will increase rates by 40% or more for commercial customers.

The rate caps for First Energy, West Penn Power and PECO are set to expire the following year and comparable rate increases are forecasted. Although electricity

Planning for Change in the Electric Industry

By Susan Bruce and Vicki KarandrikasMcNees Wallace & Nurick LLC

supply from the local utility will remain available, the rates that the local utility can charge commercial customers for “default” electric supply service when the rate caps expire are commonly designed to be more expensive or consist of unattractive options, such as hourly pricing.

In place of the default supply service from the local utility, Pennsylvania businesses have the option to purchase electric supply as a commodity from competitive electric generation suppliers, known as EGSs. The Pennsylvania Public Utility Commission will not be overseeing contract terms and negotiations between commercial customers and EGSs. The negotiated contract terms and conditions dictate the product and the price being purchased. Given the complexity of the energy markets and the regulatory overlay over this market, there are unique contracting issues to consider.

Dealers should begin planning now for the transition. As a first step, it is essential for businesses to understand their electric usage for each facility. Understanding your energy consumption will help you assess the options available in the restructured environment. If you have multiple dealer locations, understanding the usage at each facility will help guide your decision whether to separately contract for each location or aggregate the facilities together and purchase supply for all facilities collectively. This can be done even if your dealerships are located in different utility service territories. Also, dealers should be aware that there are differences in the cost of electricity in different locations, which could impact business siting or expansion decisions.

Second, dealers should develop an energy cost containment strategy. A well-structured competitive

I

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procurement and contracting strategy may help mitigate increases. Each business must also analyze its ability to take advantage of potential opportunities that may exist in the market due to factors such as the ability to reduce usage during high-cost hours or withstand hourly or monthly variability in electricity prices if this produces the lowest cost on an annual basis.

Conservation and energy efficiency opportunities can be critical aspects of energy cost containment strategies. For dealerships, demand-side response programs that focus on lighting and HVAC are worth exploring. Procurement strategies can also complement environmental initiatives by focusing on “green” power. It may also be worth exploring the viability of installing and utilizing renewable generation resources such as wind, fuel cells or solar panels at your business. Incentives are available for such resources, and they could be used to reduce ongoing energy costs as well as potentially differentiate you from competitors.

Even though caps for most of the Commonwealth do not begin to expire until at least the end of 2009, it is not too early to begin planning now for the change. Some energy

efficiency and conservation efforts may take time to implement. Dealers should begin preparing now to plan for the transition. Those who seek to issue requests for proposals (RFP) for electric supply bids will need to do so as early as January 2009 for the PPL service area, which covers 29 Pennsylvania counties. During 2008, businesses can start analyzing energy costs and market patterns to develop a purchasing strategy, including the determination of the times of the year when more favorable pricing may be available in the competitive market.

We are advising our clients to work with us on many fronts, from becoming educated on the dynamics of the new market, identifying procurement goals, starting the RFP process to adopting green power alternatives. While all businesses will be affected by changes in electricity procurement, those businesses that effectively understand and plan for the change can use the new market to their advantage.

Susan and Vicki represent commercial, institutional and industrial consumers with regard to the purchase of electric power. They are members of McNees Wallace & Nurick LLC’s Energy Group. They also gratefully acknowledge their colleague Pamela C. Polacek for her contributions to this article.

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TOOLSFOR

SUCCESS

the 2008 PAA AUTO TECHNOLOGY

COMPETITION

The U.S. Department of Labor estimates that the auto industry will have to fill 35,000 automotive technician jobs EACH YEAR through the end of

this decade to keep up with demand.

Caleb Hiller and Dennis Bamford, students at Wallenpaupack Area High School in Hawley, Pennsylvania, were the winners of the PAA Automotive Competition held on February 14, 2008, at the Radisson Penn Harris Hotel and Convention Center, and placed sixth at the 2008 National Automotive Technology Competition held March 24-27, 2008, at the New York International Auto Show in Manhattan.

The students were selected for the PAA competition through a written qualifying exam, in which a pool of 100 students from 15 schools participated.

Prizes were awarded to participating students and schools, thanks to the generous support of local dealerships and industry suppliers. The PAA Foundation also awarded the students from the top three winning teams with scholarships to further their education in an automotive technology program at the post-secondary school of their choice.

Hiller and Bamford, together with their instructor, Mark Watson, proceeded to the National Competition in New York finishing sixth in the competition. The National Competition pits the nation’s best high school automotive vocational education students against one another for the title of ‘America’s Top Technician’.

How the Contest WorksThe rules of the contest are simple. Each team of students is assigned an automobile that is rigged to malfunction in a number of ways. Using a repair order with actual customer complaints, the student teams must diagnose and repair the problem within the allotted time.

The students’ knowledge of emissions control systems, alignment, electrical test equipment, airbag components, oscilloscope usage and mechanical measurement equipment is also tested during a series of intensive work station sessions. To prepare for the competition, students were provided with 2008 model vehicles from local dealerships.

Encouraging Further EducationIn 2008 the PAA Foundation will award $250,000 in scholarships to young people who are interested in establishing careers in Pennsylvania new car and truck dealerships. These scholarships will help foster the education of future employees in Pennsylvania new car and truck dealerships. A total of $580,000 has been awarded to 61 students in the last three years.

Dealers can do their part too by becoming involved with the AYES program. Call 1-800-242-3745 for more information.

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A special thanks to the students, schools, dealerships and industry sponsors who contributed to this year’s event.

INDUSTRY SPONSORS: AAA Central Penn; BG Industries; Central Atlantic Toyota; Chilton, a part of Cengage Learning; Chrysler, LLC; Forty-Niners Parts & Service Club; H & F Tire Center; Hunter Engineering; Matco Tools; Permatex;

PPC Lubricants; Snap-On; Turner Hydraulics; Wurth USA; Zep Manufacturing

Team Honda Jones Family of Dealerships, LancasterBurne Automobile Dealerships, ScrantonArmando Reo and Steve Syryla CTC of Lackawanna County

Team Buick Jones Family of Dealerships, LancasterJennings Buick Pontiac GMC, ChambersburgDavid Forrester and Dusty Noll Franklin County CTC

Team Ford Hoffman Ford, HarrisburgMcCormick Eagle Ford, Lock HavenNicole Rousseau and Travis Snook Keystone Central CTC

Team Jeep Brenner Family Dealerships, MechanicsburgB & B Dodge, HonesdaleCaleb Hiller and Dennis Bamford Wallenpaupack Area HS, 1st place

Team Scion Bobby Rahal Toyota Scion, MechanicsburgMotorworld, Wilkes-BarreMatthew Wegrzynowicz and Joseph Sarti West Side AVTS

Team Toyota

Bobby Rahal Toyota Scion, MechanicsburgFairfield Auto Group, MuncyDaryl Nash and Joel Shirn Williamsport Area HS.

Team Hummer Sutliff Hummer, MechanicsburgTrevor Hawley and Thylan McCurdy Lebanon County CTC

Team Chevy Sutliff Chevrolet, HarrisburgTom Kerr Chevrolet, MontroseJarrod Hall and Steve Johnson Susquehanna County CTC

Team Chrysler Brenner Family Dealerships, MechanicsburgTunkhannock Auto Mart, TunkhannockShane Fabiani and Corey Wilsey Tunkhannock HS, 3rd place

Team Saturn Sutliff Saturn, HarrisburgFrederick Harvey and Harrison Young Cumberland Perry AVTS, 2nd place

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One of the primary reasons for failure of a dealership, following the retirement or untimely death of the dealer, can often be summed up by the old adage, “they never planned to fail, they just failed to plan”.

usiness succession planning is often talked about but rarely completed. Without a plan in place, the dealer’s serious illness, disability, or death will cause a crisis, and it will be difficult, even with the best advisors, for those thrust unexpectedly into the decision making role to make decisions in the best interest of the business and the family.

Business succession planning is the process of planning for the future success of the dealership. This should not be confused with estate planning, which is the process of planning to transfer assets to your heirs via the most tax advantageous strategies. The Small Business Administration notes that only 30% of family-run companies succeed into the second generation. By completing a succession plan, you not only greatly increase the odds that your business will continue to succeed, but you can guide the details of how that success will be attained.

Business succession planning is a necessary, but difficult process. It forces the dealer to accept their own mortality and perhaps even more difficult, puts them in a position where they must evaluate the candidates to be their successor. Often times this places the dealer in the unenviable position of evaluating the management capabilities, the commitment and the likelihood of future success of their own children. It also forces you to consider contingencies you would sooner not address on an emotional level.

For instance, what if the child who is your clear successor predeceases you? Is there a plan in place that will address this contingency? Perhaps your wife and daughter-in-law have always wanted to be business partners, or perhaps not. A thorough succession plan will provide a map for the family to follow to weather the crisis and allow the business to survive.

It is critical to consider succession planning not only in the event of death, but also to plan for disability or retirement in the normal course. A dialogue with the family is often the best way to put a successful plan in place while addressing the personal feelings and ambitions of the individual members.

Due to the unpleasantness of the process and potential family conflicts that may occur, it is often wise to consider an outside professional to assist in the business planning process. An outsider can be objective about the abilities of the potential successor without being influenced by family dynamics.

An updated business valuation is an often overlooked tool to a successful succession plan. It is important to know the value of the business so that liquidity for succession taxes can be provided within the plan. If only some of the children are to be business owners, a valuation can assist you in planning how the balance of your non-business assets are divided so that your heirs are treated fairly. It will also reduce the likelihood that the business will be undervalued or overvalued by your heirs if a sale becomes a necessity.

Consideration must be given not only to the business value, but debts and loans outside the business whose satisfaction may reduce the assets available to those who do not become the successor owners.

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Without planning, you may find that you have an unexpected result where the successor gets the business and the others inherit virtually nothing because your business comprises most of your net worth. A good plan will consider liquidity issues and will address the specifics of where the assets will come from to satisfy debts and death taxes and how the net assets will be fairly distributed.

It is never too early to begin the succession planning process. The earlier you begin, the more time you have to evaluate your options and formulate your plan accordingly. As you evaluate the potential successors you may determine there are no family candidates currently qualified.

In most situations, with ample time, you can identify and develop your successor. However, as the successor is being developed you need contingency plans. The senior members of your management team must be considered in this phase of succession planning. What will there roles be while the next successor is developed? Do they need additional training? How will they be compensated and tied to the dealership? When will the successor be ready?

Planning early enough to give yourself time to train your successor and work with them will greatly improve the chances of a successful transition. It will also give you an opportunity to evaluate your successor’s goals and ideas for the future growth of the dealership and successful competitive positioning. Working together on a business plan for the future will allow your successor to benefit from your input, gained through years of business experience, and potentially prevent your successor from making costly mistakes.

There are plenty of excuses not to plan; “I am only 50 years old”; “None of my children are ready yet”; “I can’t afford to transfer my ownership right now”; “I can’t decide which child will be the controlling shareholder”. Regardless of the reason, if the dealer suddenly dies or is disabled without a succession plan, family members, attorneys, remaining employees, and possibly the courts will determine the succession plan for the dealer. Unfortunately, this plan may not coincide with the dealer’s wishes and most likely will cause a great deal of family strife, employee uncertainty and, at the end of the day, loss of value to the heirs.

Planning for the future success of your dealership increases the chances you and your family will receive the maximum value from your life’s work and, in the case of an untimely death, that your dealership and your family will not be torn apart by an uncertain transition process. The best course of action is to plan to succeed through business succession planning.

Robert J. Murphy, CPA, CVA is a Partner with Boyer & Ritter, CPAs in Camp Hill, Pennsylvania. Boyer & Ritter provides a full range of accounting and consulting services to automobile dealers and has provided business succession planning services for numerous closely-held automobile dealerships. For information about Business Succession Planning, contact Bob at (800) 843-1120, or rmurphy@cpabr.com.

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Relax . . .We’ll take over from the time you arrive.

A perfect place to catch a spectacular sunset over the serene Gulf of Mexico.

Join fellow dealers and friends at PAA’s Fall Conference to be held at the Ritz Carlton, Naples, Florida October 15 - 19, 2008. Naples has a multitude of activities and attractions to suit any desire, including exquisite shops, boutiques and art galleries. Naples also provides a variety of dining options that are sure to satisfy any taste.

The Ritz Carlton offers the finest accommodations and amenities. It is the area’s only Mobile Five Star and AAA Five Diamond resort. The Ritz Carlton Naples features:

• Breathtaking views of the Gulf of Mexico• Exclusive world class spa• Two heated outdoor pools and full service fitness center• Seven restaurants:

o The Lobby Lounge o The Grill o The Terraceo The Poolside Caféo Gourmet Shopo Artisans in the Dining Roomo H20o Gumbo Limbo

• Tiburon Golf Course: A championship 36 hole golf course designed by the legendary Greg Norman.

PAA Fall Conference 2008October 15 - 19, 2008

The Ritz-Carlton Naples, Florida

www.ritzcarlton.comwww.paa.org

1-800-242-3745

• Connie Podesta will kick off the business session on Thursday, October 16. She is an expert in the psychology of human behavior and has spent more than 25 years helping millions of people achieve the success they desire.• Christopher Buckley is quoted as being “the quintessential political novelist of his time.” He is one of the most renowned political satirists and is widely known for his popular novels, such as Boomsday, God is My Broker, Little Green Men and Thank you for Smoking, which was developed into a major motion picture recently. He provides a humorous prospective on current events and culture, and will lend some well needed comic relief to this year’s exciting presidential election.• Jim Ziegler, who has spoken at previous PAA events, has researched, studied and trained in the retail automobile industry as if he were pursuing a Masters’ Degree program. He is a student of the automotive industry. His intellectual dynamics and incredible ability to perform at levels above the industry has allowed him the dexterity to accurately predict future industry trends and events. • Jim Lentz, President of Toyota Motor Sales, USA, has also been invited to address the group. Mr. Lentz came to Toyota in 1982 and over the years he has advanced through many positions in the company, including Vice President of Marketing in the Toyota division. Mr. Lentz can provide a keen perspicacity into the future of the automotive retail industry.

The fall conference presents the perfect opportunity to explore the beauty and lifestyle of Naples while spending time with old and new friends in a relaxed and exquisite paradise setting. Look for further details regarding the conference in the brochure to be mailed in May.

Inform. . .The business programs will feature speakers who will challenge and inspire you:

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Send your articles, article ideas, or comments to PAAutomotive Magazine Editor, Melanie Bible. Email: mbible@paa.org Fax: (717)213-0102

Mail: 1925 North Front Street, Harrisburg, PA 17102

1925 North Front Street, Harrisburg, PA 17102

PRSRT STDU.S. POSTAGE

PAIDHARRISBURG, PA

PERMIT # 118

IMPORTANT NOTICE ON PROFITABILITY

At the recent PAA Board of Directors meeting, the Board determined that it was imperative, during these difficult economic times, to offer a series of seminars dealing with ways to increase profitability in the dealership.

The PAA Foundation, in response to the need for widespread training and in fitting with their mission to provide educational opportunities to dealership employees, generously donated $100,000 to help subsidize the cost of this initiative and promote effectiveness and success in Pennsylvania dealerships.

Together with regional dealer associations in Philadelphia, Pittsburgh, Lehigh Valley, Erie and Harrisburg, the Pennsylvania Automotive Association will embark over the next four months on a massive educational endeavor to bring to various locations throughout the state NADA’s Lifeline to Profits as well as a series of training sessions delivered by top industry speakers on increasing profitability in the sales, parts, service, and F&I departments.

Additional information will be made available as the dates and locations for these seminars are finalized.