3-21-20 Updates from NIADAs Shaun Peterson

Hey guys and girls, how you doing? Hope everyone is having a great, great Saturday. We grabbed Sean for just a minute. Nieda just to help, kind of give us a little bit of clarity, a little calming reassurance, hopefully Sean and some education for us dealers on we hear a lot of things, obviously the good and the bad of social media age that we're in. We can all get really, really educated and a lot of us can get a lot of the wrong education and sometimes it's the loudest voices pushing out fear tactics or wrong information that can lead business owners to make bad decisions. Right.

Well, there's a lot of information out there right now, as you might imagine. And things are constantly changing. One minute we're hearing, you know, the CDC recommend no, no meetings, more than 50 people and now 10 people to, you know, you know, it's, everything's changing rapidly. And with that I think comes the potential for misinformation and certainly the potential for concern as people are trying to figure out what things are really happening and what it means.

Okay, so from dealer standpoint, Luke, I think we want to touch on two things. Are we considered, is the sales arm of our dealerships considered essential for those of us that feel like we want to or must stay open? If you have any clarity on that, Sean. And then also maybe we can quickly touch on for those of us that have RFCs, are we not going to be able to repo cars for 120 days and we need to be worried about that? Maybe. Do you have any kind of clarity or input on those two issues?

Sure. So let me, let me start with the first thing. So with, with respect to our dealerships considered essential businesses. Now let me start with what's happening at the federal level and break down to what's happening at state, local levels. So on Thursday afternoon, the Trump administration, through the Department of Homeland Security came out with a guidance document. And in that guidance document they, for they didn't necessarily call them essential businesses per se, but essential operations, essential employees, kind of alluding to that. But what they said in that guidance document was auto service and repair facilities would be deemed essential. They were silent on sales. The federal government and the president has said this over the course of his last couple of press conferences is that he doesn't intend to do any kind of national moratorium on, on anything. He's just advising people to follow the guidance and do this 15 day self quarantine where possible. And if you can work from home, work from home, stay out of crowds of 10 or more people that sort of stuff. State and local governments have started to issue these shelter in place orders. We've seen it now in California, we've seen it in New York, seen it in Pennsylvania. Illinois had a version of that yesterday. We've seen cities and municipalities and counties do some similar things in states as well. So in those orders, the governors or mayors or county administrators, whatever the case may be, have outlined what constitutes essential businesses that can continue to operate in public. Now keep in mind that, you know, businesses can still work from home and quote, unquote, operate, but in terms of being open for places in the public, that's kind of what these orders are referencing. And all of the states and all of the cities are interpreting things very differently. There's. I wish there was one uniform position, but there certainly is not. We've seen some states come out and say sales is not permitted. We've seen some states come out and say, you know, maybe not as clearly or bluntly that sales are included, but the interpretation being that sales are permitted. So unfortunately there's not any consistent application across the country. It's just one of those things that dealers in local municipalities states are going to have to keep an eye on. We'll certainly pass information on as we get it. Now, Niada sent a letter to the National Governors association and the Council of Mayors and a couple of other associations that represent those elected officials at state and local levels asking them to take the interpretation that automotive sales, along with service and maintenance and repair, is an essential business for lots of reasons, one of which being the transportation that those individuals in other essential businesses need to get to and from their works. We need doctors to have reliable transportation to get to the hospital and folks in the distribution chain to get to their jobs. And so many other essential businesses that we think of as essential during this crisis. Well, you need businesses to be able to support that. If somebody gets in a wreck, they need to be able to go and buy a new car. If somebody has something that gets damaged, well, they may need to go and buy a new car or certainly have it repaired. So those are the positions that we're continuing to advocate and we'll continue to push for as consistent an approach as we can, knowing that these local governments are, are doing what they think is best in their community.

So on the. So that kind of covers the essential part of it. And I guess if you have a service facility within your dealership, Sean, how would that work? If they deem sales to be non essential and service to be essential, would you just send your Sales staff home and keep your service side open. Is that something you could do, you think?

Well, and again, I think that goes to the very different interpretations that we're seeing across the country. I've certainly heard of dealerships that have made the determination if sales is not specifically listed as essential, but service and repair is. I've heard that some dealers are keeping their sales staff there. Conversely, if sales is not specifically listed, we've heard of some dealers that are making determination that those sales folks should not be there and they're just going to keep open their service departments and, and such.

And would it be Sean? And I don't want any dealer to endanger anyone. I don't want people to break the law. I guess this question would be having your sales staff still work leads virtually. There's no reason not to do that, correct?

Well, so most of the orders that I've seen, and again, things differ by jurisdiction. Most of the orders that I've seen are specific to the workplace where there's gathering and that sort of stuff. They're not applicable. It's not like quote, unquote, close your business. Same kind of concept as the drive thru, being able to remain open or delivery food service. The idea is that we don't want people. The idea that they're putting out there is they want people congregating. But to the extent that things can be done virtually, it's not, we're closing your business. You can continue to operate your business to the extent that those can be done virtually.

I guess we could always set up a way to sign documents virtually and all this, if it came to. And somebody picking their car up from the service department, I guess we could do those type things. Maybe we need to think outside the box in those situations.

Yeah. And I think again, it's going to be one of those things that's going to be very dependent on the jurisdiction you're in. And I would, I would tell dealers, like, if you're in one of those jurisdictions where, you know, your governor or your local municipality has made a decision that, you know, we need to, you know, shelter in place, look very carefully at the order, you know, may consider consulting with your individual attorney. What does this mean for us? We will do our very best to stay on top of them. But as you can imagine, you know, that's yeah, a rapidly changing phenomenon and they're just different all across the country.

So the next thing we were wondering about, Jeff, was what would happen to collections in any legislation that you see coming through? Repossessions Collections, those type things.

So let me just say that there is no legislation pending and I checked again this morning because this is something that's hot and heavy. There's no legislation that is pending that would prevent the servicing of accounts repossession if that was something that the dealers deemed to be appropriate. There are certain members of Congress that have put forth both in writing and stated verbally that they would like to see legislation or they have plans that they want to include those kind of moratoriums. Maxine Waters, who's the chairwoman of the Financial Services Committee in the House, has released a written plan that would include some kind of moratorium, excuse me, if it was passed, but there's been no specific bill that has been introduced. The relief package that passed the Congress and was signed by the President a couple of days ago does not include anything like that. There's a third. This is actually the third bill that's going ongoing discussions as we speak. And quite frankly would expect that there could be something signed, sealed and delivered probably by the end of the weekend. I know that the rumor mills that I'm hearing from Washington D.C. is that the Senate is in the kitchen cooking and once they get it done it it likely is going to happen very quickly after that. So we'll all cross our fingers on that. I'm not hearing anything in that bill that would contain such a moratorium, but we will certainly be vigilant in watching and making sure.

One other piece of legislation I want to ask you about was with the FMLA expansion and all that. Can you help decipher what us as dealers should be looking at there? And also how many employees do you have to have to afford to be relative and this, that and other.

So let me tell you that we yesterday released a series of updates, guidance, documents, interpretations, those sorts of things, best practices on the NIADA website, if you go to covid19.niada.com you can see all sorts of resources that are available. Amongst those resources is a kind of a walkthrough of that particular legislation and what it means for small businesses. So there's two components to that. One is an extended FMLA leave and the second piece is an emergency paid leave provision. Just a quick summary. Those provisions apply to companies that are less than 500 employees. In essence, the idea is that if certain triggering events require one of your employees to be home to deal with coronavirus, they get symptoms or related issues that specifically tied to the virus, they're entitled to paid leave. There's a process for you as business owners to get tax credits for paying that paid leave. And it's all outlined on that website. I'll also tell you that, you know, one of the concerns that small business owners had with respect to that legislation is the immediacy and concern of cash flow if you're having to pay that sick leave. And the tax credit would be something that is presumably taken against your next quarterly filing. Well, we may have cash flow issues because we won't be able to realize the credit for 60 days, 90 days, whatever the case may be. So the Department of Labor literally about three hours ago, issued guidance that I'm actually still sorting through. But we've also we posted that press Release on this covid19.niada.com website as well, so viewers can go and review that along with me.

That's awesome. And I know that NIADA is working hard to get all this figured out, and we appreciate your time and explaining some of it to us.

Yeah, Sean, seriously, thank you for your time. We're definitely going to talk again on Monday. I hope we'll see how this thing pans out through the weekend and any kind of latent breaking news that dealers need to know, I'm sure you'll be around.

Absolutely. We are here at your service and we'll do our very best to gather the information and turn it around and pass it forward. Certainly, if any of the dealers have questions, concerns, or need additional assistance, please don't hesitate to reach out to us.

Thank you so much, Sean. Awesome.

Have a good weekend.

All right.

Take care, guys. See ya. Bye. Bye.