Trade News – Page 666

Victory Automotive Group files, later dismisses, lawsuit against DealerSocket

Victory Automotive Group filed — and days later dismissed — a breach-of-contract lawsuit against dealership technology company DealerSocket related to use of its software.

Victory, with 45 dealerships in 12 states, filed the lawsuit Thursday against DealerSocket in federal court in Texas. The dealership group's lawsuit alleged that DealerSocket "breached the contract between the parties by failing to provide products and services that were functional and that could support the business requirements of the Victory Automotive dealerships."

The group initially asked a federal court "to declare that Plaintiff's decision to terminate the contract between Victory Automotive and DealerSocket was justified and proper."

Victory on Monday voluntarily dismissed the case, according to a court filing. An attorney for the dealership group would not confirm whether Victory dismissed the lawsuit after settling claims with DealerSocket, saying only that the group had no …

Art Schwartz, former GM labor negotiator, dies of COVID-19 at 72

Art Schwartz, president of Labor and Economic Associates and a former labor negotiator for General Motors, died Saturday.

He was 72. He died at St. Joseph Mercy Ann Arbor Hospital in Michigan after a battle with COVID-19.

Schwartz was a skilled negotiator, said Kristin Dziczek, a friend of Schwartz and vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor. He shared his knowledge of labor contracts and bargaining throughout the industry, she said.

Schwartz started his career at the University of Michigan where he taught labor relations before shifting to GM in 1985.

He was general director of the company's labor relations staff where he negotiated with the UAW, IUE-CWA and United Steelworkers of America. He was also head of labor planning and was responsible for designing and administering all of the automaker's special attrition programs.

"During his 24 years acr…

Ferrari CEO search may take months, cover non-auto candidates, report says

Ferrari may take months rather than weeks to name a new boss after CEO Louis Camilleri abruptly left the Italian supercar maker, according to people familiar with the matter.

The company is taking a thorough and deliberate approach to resolve its second leadership crisis in as many years, the people said. Ferrari’s board will meet Tuesday for a preliminary review of candidates for the role, they said, asking not to be named as the company’s plans aren’t public.

Fiat Chrysler Automobiles CEO Mike Manley, who media reports have linked to the job, isn’t currently in the running, the people said. Manley has previously said he’ll stay at the Italian-American carmaker even after its planned merger with France’s PSA Group. Italian daily Il Messaggero reported over the weekend that Manley was a top candidate.

A spokesman for Ferrari declined to comment.

Chairman John Elkann is taking over the CEO role on an interim basis until a replacement for Camilleri …

Carlos Ghosn investigated by France over possible tax evasion, report says

Auto executive-turned-fugitive Carlos Ghosn is under investigation in France for possible tax evasion during his last three years heading Renault SA and Nissan Motor Co., according to a person familiar with the matter.

Ghosn and French tax authorities have been discussing since the middle of last year whether the former CEO should have been considered a French resident during 2016, 2017 and 2018, said the person, who asked not to be named because the information isn’t public. Ghosn declared in 2012 that he had moved to the Netherlands and was subsequently treated as a non-resident, the person said.

The newspaper Liberation reported Monday that a French judge allowed authorities to seize almost 13 million euros ($16 million) in assets from Ghosn and his wife, Carole, pending the outcome of the probe. Authorities are preparing a “major” tax adjustment, the paper said.

A spokeswoman for Ghosn declined to comment.

The tax probe adds to Ghosn’s legal w…

Consumers prefer riding solo but feel lonely in other aspects of life

People prefer personal transportation.

From bicycles to cars, transportation options that provide seclusion are the choice for consumers across the globe, who express reluctance to use public transportation and air travel.

Those are among the findings in the ninth annual "Further With Ford" trends report, issued Monday by Ford Motor Co. and compiled by Sheryl Connelly, the company's chief futurist.

The report underscores major developments across the transportation industry during the coronavirus pandemic. More than three-quarters of respondents agree with the statement they "can't imagine a life without having my own automobile," and 40 percent say their household needs more vehicles.

Because of the pandemic, 58 percent say they are less likely to travel by airplane; 52 percent are eschewing subways and buses; and 47 percent say they're less likely to use ride-hailing services and taxis.

Shifts in trans…

DAILY DRIVE PODCAST: December 14, 2020 | Magna’s Kotagiri on new CEO role, driving growth and Don Walker’s legacy

Join Automotive News Publisher Jason Stein for a daily podcast series about the coronavirus crisis. He’ll speak with industry experts, insiders and Automotive News reporters about how the virus is impacting and reshaping the automotive industry.

Incoming Magna CEO Swamy Kotagiri discusses the road ahead for the Canadian supplier as Don Walker prepares to retire at the end of the year. He also shares insight on bringing new products to market and opportunities for Magna Steyr in North America.

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UAW to get independent monitor in deal with feds

DETROIT — The UAW will avoid a government takeover under a deal struck with the U.S. Justice Department that will put the union under the oversight of an independent monitor for six years and allow members to change the way leaders are elected.

The union will pay $1.5 million to resolve tax issues related to the scandal and already has contributed $15 million toward worker training to make up for money stolen by corrupt former leaders. However, prosecutors will not levy additional fines or file racketeering charges against the union.

“The UAW does not have a problem with organized crime,” U.S. Attorney Matthew Schneider said at a news conference Monday.

The deal could allow UAW members to directly elect the president and vice presidents for the first time in the union’s history. A secret-ballot referendum will determine whether to end the longtime practice of having the union’s administrative caucus choose a new slate of leaders every four years.

Dealers should be treated as partners in EVs

There's no Operation Warp Speed for national distribution of electric vehicles. Every brand is on its own, and how each goes about it says as much about the brand's relations with retailers as its commitment to cleaner personal transportation.

At issue is who should pay for facility upgrades required to sell and service EVs.

Last month, Cadillac's 880 U.S. dealers were offered a choice of spending at least $200,000 for chargers, tooling and training to be able to sell Cadillac's EVs — starting with the Lyriq in 2022 — or taking a buyout to give up the franchise. About 1 in 6 reportedly cashed in their chips.

Factors outside of electrification are at play within General Motors' halo brand. Cadillac remains over-dealered in the U.S., especially relative to other luxury lines, diluting throughput for its dealer network and squeezing profitability as a result. It's easy to understand why a low-volume Cadillac dealer, facing a large estimate for upgrades, se…

Yellen was key to leasing protection

TO THE EDITOR:

As a much acclaimed chair of the Federal Reserve Board and chief economic adviser, Janet Yellen, President-elect Joe Biden's nominee to become the next secretary of the Treasury, has received many accolades and press attention. Nevertheless, her critical role in protecting consumer vehicle leasing from a required interest rate disclosure has never been recognized.

During drafting of the 1993 Truth in Leasing Regulation M landmark revisions, the major bone of contention between consumer groups and the industry was a lease rate disclosure analogous to the APR in credit sales. At the invitation of Yellen and as managing directors of the Association of Consumer Vehicle Lessors, Randall McCathren and I met with then-Fed Gov. Yellen in 1994 to discuss the issue.

"We'd all love to have a lease rate disclosure, but here's the problem," I told Yellen. "In order to have an interest rate, we would need to have the final value, which in this case is t…

Competency hearing in Brockman case sought

In May 2017, Bob Brockman emailed a friend, who also was a doctor, asking for a physician recommendation to discuss losing his sense of smell.

His wife and son, Brockman wrote, according to a court document his attorneys filed last week, "are afraid that it is an early sign of alzheimer's or dementia. I am feeling good but am having increasing memory problems."

In 2018 and 2019, Brockman — who until last month was chairman and CEO of dealership technology giant Reynolds and Reynolds Co. — consulted with physicians and specialists, who ultimately diagnosed him with symptoms indicative of Parkinson's disease or Lewy body dementia, according to a court filing. Doctors assessed Brockman's dementia as mild to moderate, according to the filing.

But his illness is progressive, his lawyers wrote in a motion filed last week in federal court in California, where Brockman, 79, faces charges of tax evasion and wire fraud. They are seeking a c…

Profits, cash boost dealership M&A this year

"Red hot" is how George Karolis describes the current dealership buy-sell market.

Karolis is president of Presidio Group, an investment banking and dealership advisory firm in San Francisco, which has sold 37 dealerships this year worth more than $2 billion.

"We expect to exceed that number of dealerships-sold pace next year," he said. "It's just on fire. It's busier than we've ever seen," he said of the merger and acquisition market.

Dealership buy-sell activity soared in the third quarter as two public auto retailers spent more than $1.2 billion on acquisitions, and it is likely to continue at high — perhaps record — levels into 2021, buy-sell experts say.

"We think 2021's going to be more active than 2020, which says a lot, since 2020 is tracking to be a record year," said Erin Kerrigan, managing director of Kerrigan Advisors, a sell-side firm in Irvine, Calif.

Kerrigan Advisors' quarterly Blue Sky Repo…

Tools, tech ease omnichannel transition

Before the pandemic, Qvale Automotive Group had a digital retailing tool and the ability to allow customers to electronically sign documents from inside the showroom.

When the coronavirus began to surge across the U.S. this spring, Qvale discovered that its showroom could be anywhere.

With the help of videoconferencing software and remote e-signing tools, which allow the customer to electronically sign documents from outside the dealership, the retailer offered customers wary of doing business in person a virtual option — and helped generate sales amid lower volume.

"I can go to Starbucks and sign somebody up," said Geno Walsh, executive manager of retail operations for Qvale Automotive Group, which has 10 dealerships in California and Florida. "The whole Bay Area is my showroom. The whole South Florida is my showroom."

Dealers across the country — fighting for survival as the pandemic shut down showrooms in many states and sent vehicle sales pl…