JUNE 17, 2009



Automotive News at a Glance



Vendor Fee Eliminated as of July 1, 2009

COBRA Employer Requirements For New Federally Mandated COBRA Subsidy



CADA Lobbies For Federal Legislators to Assist Auto Dealers



Upcoming Seminars


Controllers: Taxation Issues and DMS Cost-Reduction
CADA Virtual Seminar: Manufacturer Bankruptcy: What it Means and Proactive Steps- Now Available in Pre:Recorded Format!

CADA Virtual Seminar: Employer Requirements for New COBRA Subsidy; Archive Now Available

Upcoming Events

Dealer Management and Leadership Summit

CADA Annual Member Golf Event


James Roland Faricy Passes Away

Tim Jackson Out of the Office This Week to Ride the Rockies!

Share Your Accomplishments



All the News That's Fit to Email!


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Reducing Lawsuit Risks of Terminations and Staff Reductions

CLICK HERE for more information!

CLICK HERE to register online!

TOMORROW! Thursday, June 18th
1:30 - 2:30 pm (may go to 3pm with Q&A)

Speaker: Todd Fredrickson
Top Denver employment attorney, Fisher & Phillips, LLP a

Don't miss this upcoming online seminar!

The EEOC’s 2008 report shows a 15.2% increase over 2007 in charges against private employers, and the highest numbers to date.  In times of high unemployment, charges of discrimination tend to rise.

Many dealerships have been forced to downsize operations and/or may be contemplating further reductions. This session will show how to minimize the risk of claims and lawsuits stemming from terminations and reductions in force (“RIFs”) along with practical guidance to end employment relationships as amicably as possible.  Highlights include:

  • Avoidance of discrimination claims, layoff notification laws, laws covering severance agreements and when to use them, and various end-of-employment issues such as final pay, COBRA, and unemployment compensation.
    • Including the implications of recent and significant changes to the Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA)
  • Retaining essential talent as part of the RIF analysis, supporting those employees who are in transition, and effectively communicating with employees regarding terminations and workforce reductions
  • Checklists and plans to conduct proper and defensible terminations and RIFs
A CLICK HERE for more information
on this training session.

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Listed here are several articles pertaining to the
auto industry in general that appeared recently in newspapers and other media outlets across the nation.

  • GM Agrees to Sell Saab to Sweden's Koenigsegg
    Fox News, June 16
    General Motors Corp. on Tuesday said it has signed a deal to sell its Saab unit to a consortium led by Swedish luxury sports carmaker Koenigsegg Automotive AB.
  • GM to reverse closing of 41 dealerships
    The Detroit News, June 11
    Automaker to reverse plans for 41 affiliates; bill introduced in House to hinder shutdowns
  • Lawmakers Chide Automakers Over Dealership Cuts
    The Washington Post, June 13

    In his testimony on Capitol Hill, Chrysler President Jim Press, center, defended the dealership cuts, which affect every state except Alaska.
  • Showdown over auto dealer cuts
    CNN Money, June 14
    Auto dealers say closing facilities will not save automakers much money, but GM and Chrysler say closures are crucial to survival.
  • Dealer says 2 franchises on GM hit list
    The Washington Times, Juen 12
    After unsuccessfully battling Chrysler's dealer terminations for three weeks, Washington-area auto dealers are now fighting not just General Motors' franchise rejections but the terms both automakers are offering to the dealers they are keeping.
  • Congress Grills GM, Chrysler on Closings
    The Wall Street Journal, June 13
    Top executives of General Motors Corp. and Chrysler Group LLC appeared before Congress on Friday for the second time in two weeks to defend plans to cut thousands of dealers, dismissing criticism from lawmakers that they have treated the retailers unfairly.
  • GM, Chrysler spar with House on dealer closings
    Detroit Free Press, June 12

    U.S. House members vented their frustration at General Motors Corp. and Chrysler Group LLC’s dealer closings today, demanding a fuller explanation of how the automakers made their choices and whether they would save any money.
  • Back on Hill, Automakers Defend Dealer Closings
    The New York Times, June 12
    Automotive executives from General Motors and Chrysler defended their decision to shut down 2,000 dealerships across the country, telling a panel of skeptical lawmakers on Friday that the cull was necessary to their restructuring and survival.
  • Detroitosaurus wrecks
    The Economist, June 4

    The lessons for America and the car industry from the biggest industrial collapse ever
  • USA Today, Open Road
  • …more news articles are included at the end of this issue.

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The Colorado General Assembly passed (SB 09-275), which eliminates any amount that vendors such as automotive retailers/dealers can deduct from state sales tax collections as part of covering costs to provide this function for government.  Last month we alerted you to a reduction in the vendor fee, but this subsequent legislation eliminates it for a period of time until at least June 30, 2011. The Governor signed the bill on May 19th.    

This legislation was fought hard by CADA and many other business groups many times at the capitol this year, but ultimately passed.  The effective date is July 1st, and it applies to any return made on or after that date. The allowable vendor fee (also referred to as “service fee”) remains at the previously reduced 1.35% rate from March 1st - July 1st.

There is a hold-harmless that applies for any returns filed between July 1 and August 1, 2009.  So if the vendor fee is withheld, the adjustment can be made following month

Other clarifications:

  • This is an elimination of the vendor fee for state sales and use tax, it does not affect local vendor/service fees
  • There is no change to the state sales/use tax rate which remains at 2.9 percent.

Visit the March 18, 2009 Open Road, Regulatory & Legal Updates, Reduction in State Sales / Use Vendor Fee Applies Immediately for more information on the prior change and for a link to the DRP 1002, Colorado Sales/Use Tax Rates chart.  

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Dealers May Need to Send Notice Letters by April 18th

The American Recovery and Reinvestment Act of 2009 (ARRA) [“Stimulus bill”] provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA.  Eligible employees include those who became eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment.   

  • A general notice of this subsidy must be provided to all employees (not just those who were involuntarily terminated) who became eligible for COBRA during that time period.  The basis for this is there could be disputes over what constitutes “involuntary”

Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months

The Department of Labor’s main COBRA page can be found at:
(see bottom of the page for a fact sheet, model notices, and other information for employers)


  • CADA offered a webinar on April 7th, 2009, conducted by a nationally recognized law firm.  The archive version of this session is available and can be viewed from your computer at any time that is convenient for you.  CLICK HERE for more information!

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If you have questions on any legal or regulatory topic, please contact:

DISCLAIMER: CADA is not authorized to dispense legal advice.
The information contained in this weekly email is intended to provide important updates and reminders regarding statutes, litigation, and regulations. CADA always advises that dealers should consult legal counsel on the specifics of any laws or regulations to ensure proper compliance


By Melissa Kuipers, Vice President of Government Relations & Communications

Last week, CADA dealers and staff spent a second consecutive week in Washington DC lobbying Federal legislators to assist automobile dealers in the wake of the GM and Chrysler bankruptcies.  We met with several members of the Colorado Congressional delegation and their staff to provide them with an updated briefing on dealer terminations.  Our meetings included staff for Sen. Mark Udall (D-CO), Sen. Michael Bennet (D-CO), Rep. Doug Lamborn (R-CO), Rep. Ed Perlmutter (D-CO), Rep. Jared Polis (D-CO), Rep. Betsey Markey (D-CO), and Rep. Diana DeGette (D-CO).  As luck would have it, Rep. John Salazar (D-CO) was on my flight from Washington DC to Denver, so I had the opportunity to talk with him on the flight back to Denver.  He is, and has always been, very supportive of dealer issues.

The focus of our meetings last week and continuing was to garner support for HR 2743.  This federal legislation was introduced last week by Rep. Frank Kratovil (D-MD) and Rep. Dan Maffei (D-NY) and has been endorsed by NADA.  The measure, referred to as the Automobile Dealer Economic Rights Restoration Act, seeks to ensure that the bankruptcies of Chrysler and GM do not eviscerate dealers’ rights under state franchise laws.  The bill currently has 132 cosponsors in the House, but we need a member of the Senate to file a companion bill in order for this measure to have a chance at passage.  For a copy of HR 2743, please click here. 

Following the Senate Commerce committee hearing on June 3, 2009 in Washington DC, Jim Press, Chrysler President, sent a letter to Sen. Jay Rockefeller (D-WV), chairman of the committee, and Sen. Kay Bailey Hutchison (R-TX), the committee’s ranking member, outlining some concessions for terminated dealers.  While we do not feel the letter goes even remotely far enough to assist terminated dealers, it does contain language wherein Chrysler promise to buy back inventory and to provide terminated dealers with a “right of first refusal” if their terminated point is considered for reopening by Chrysler in the future.  Please click here to read the letter.

Additionally last week, the “Cash for Clunkers” bill passed out of the US House of Representatives.  The bill, H.R. 2751/S. 1135, is now in the Senate.  The measure has been added to a War Supplemental bill and there is a potential it could get stripped out.  We need Colorado dealers to contact Sen. Mark Udall (202-224-5941) and Sen. Michael Bennet (202-224-5852) and to urge them to “vote YES to waive the point of order” on this bill.  This is a procedural vote and will keep the Cash for Clunkers language in the bill.  For talking points and a summary of this legislation, please click here. 

Back at the Colorado Capitol, things are still moving despite the end of the legislative session in May.  SB 281 regarding Pinnacol Assurance was signed by Governor Ritter on June 1, 2009.  This bill establishes an interim committee, which will ultimately have 16 members, to review Pinnacol’s legal structure over the summer.  The following legislators have been appointed to the committee already, and 6 more members that will be assigned soon.  Sen. Morgan Carroll, Chair (D-Aurora), Rep. Bob Gardner (R-Colorado Springs), Rep. Cheri Gerou (R-Evergreen), Sen. Ted Harvey (R-Highlands Ranch), Sen. Mary Hodge (D-Brighton), Rep. Joe Miklosi (D-Denver), Sen. Shawn Mitchell (R-Broomfield), Rep. Sal Pace (D-Pueblo), Rep. Su Ryden (D-Aurora), Sen. Lois Tochtrop (D-Thornton).  The committee has not yet posted its schedule of hearings.

Also, the Transportation Legislation Review Committee (TLRC) members have been selected.  This is the committee that will be reviewing the state sales tax databases as part of CADA’s efforts in passing HB 1230 during the 2009 Session.  The committee members are: Rep. Buffie McFadyen, Chair (D-Pueblo), Sen. Dan Gibbs, Vice Chair (D-Silverthorne), Rep. Randy Baumgardner (R-Hot Sulphur Springs), Rep. Randy Fischer (D-Ft. Collins), Rep. Jerry Frangas (D-Denver), Rep. Steve King (R-Grand Junction), Rep. Marsha Looper (R-Colorado Springs), Rep. Frank McNulty (R-Highlands Ranch), Rep. Michael Merrifield (D-Colorado Springs), Rep. Dianne Primavera (D-Broomfield), Rep. Glenn Vaad (R-Mead), Sen. Mike Kopp (R-Littleton), Sen. Scott Renfroe (R-Greeley), Sen. Chris Romer (D-Denver), Sen. Nancy Spence (R-Centennial), and Sen. Suzanne Williams (D-Aurora).  The TLRC has scheduled its first meeting for August 26 at 9:00 a.m. in room 0112 in the Capitol.

Ryan Johnson, Richard Johnson, Craig Fisher

Ryan Johnson, Melissa Kuipers, Craig Fisher, Richard Johnson

* * * * * * * *

Questions or Comments?  Please contact:

Melissa Kuipers – VP of Government Relations and Communications

melissa.kuipers@coloradodealers.org, 303.457.5115



Reducing Lawsuit Risks of Terminations and Staff Reductions

CLICK HERE for more information!

CLICK HERE to register online!

TOMORROW! Thursday, June 18th
1:30 - 2:30 pm (may go to 3pm with Q&A)

* * * * * * * *


Event Description

Employment Law WEBINAR:
Reducing Lawsuit Risks of Terminations and Staff Reductions

By Todd Fredrickson, top Denver employment attorney, Fisher & Phillips, LLP

Thursday, June 18th

1:30 – 2:30pm (may go to 3pm with Q&A)


In down economic times, reductions in force and terminations can lead to costly lawsuits.  This session will cover how to minimize the risk of employee claims and lawsuits, and also address relevant laws/regulations as well as tips on employee communications.

CLICK HERE for more information and a registration form

CLICK HERE to register online!

Controllers: Taxation issues and DMS Cost-Reduction

Bruce Nelson, CPA

Brad Bowers, CPA

Paul Gillrie, The Paul Gillrie Institute

July 15, 2009

7:30am – Noon (time tentative)

CADA Office, 290 East Speer Blvd, Denver

CPAs will review lessons learned from recent dealership tax audits, and advise dealerships on areas of risk in state/local tax audits as well as other sources of liability.
Paul Gillrie, national consultant and expert on DMS system negotiations, reducing monthly costs/billing analysis, and on the DMS market overall. 

Registration information available soon

CADA Virtual Seminar: Manufacturer Bankruptcy: What it Means and
Proactive Steps for You to Prepare

Understand your rights and responsibilities in a bankruptcy proceeding


Archive of this webinar can be viewed any time

Session was completed May 1, 2009
-Includes detailed Q &A by those linked in on May 1st

Click here for a registration form and more information (login information and slides provided upon registration)

CADA Virtual Seminar: Employer Requirements for New COBRA Subsidy

Speaker: Penny Wofford, Ford & Harrison LLP

Archive of this webinar can be viewed any time

Click here for a registration form and more information (login information and slides provided upon registration)

Session was completed April 7, 2009
-Includes detailed Q &A by those linked in on April 7th

Event Description

Dealer Management & Leadership Summit


Save the Date

Thursday, Aug. 13

8 a.m. to 7:30 p.m

Marriott Denver South at Park Meadows Drive (I-25 and Lincoln in Douglas County)
More information on speakers/agenda will be posted online as finalized.

CADA Annual Member Golf Event

Monday, August 24, 2009

12:00 Noon Shotgun Start

Glenmoor Country Club
110 Glenmoor Drive
Cherry Hills Village, 80113



James Roland Faricy, age 82, passed away at The Chelsea, First Community Village on Monday, June 8th, 2009. He was born August 5th, 1926 in Florence, Colo. to the late James and Elsie Faricy. Upon graduating from Holy Cross Abbey in Canon City, Colo., he volunteered for the US Army Air Corps during World War II. Upon his discharge he returned to Pueblo, Colo. and joined his brother, Owen in the automotive business.

During his 49 years in the automotive business, he was frequently recognized by both the National Automotive Dealer Assoc. (NADA) and the Colorado Automotive Dealer Assoc. (CADA). He served as President for CADA in 1965-66. He served as chairman of the board for the Automotive Dealers Insurance Trust from 1980-91. Roland was chosen by Business Week and the American Truck Dealer Division of NADA as dealer of the year in 1980. Roland also served on the board of trustees for St. Mary Corwin Hospital from 1979-88 and was chairman of the board from 1986-88.

He retired in 1991 and moved to South Carolina in 1997. While living in the Hilton Head area, he was actively involved in SCORE and Rotary where he was awarded the Paul Harris Fellow Award and Rotarian of the Year 2005. He was a board member of the TCL Foundation and was a 4th degree Knights of Columbus. Roland is predeceased by his parents, his sister Colleen Faricy Stamm, and three sons Jerry, James and Kevin. He is survived by his wife of 64 years, Teresa Mae; four surviving children, Brian Faricy of Folsom, Ca, Berta (Michael) Johnson of Columbus, Oh., Mel (Katie) Faricy of Pueblo, Co. and Terrie (Michael) McCabe of Columbus, Oh.; 13 grandchildren; and seven great-grandchildren; his brother Owen Faricy of Colorado Springs, Co., his sister Patricia Otis (Silvio) Troisi of Denver, Co.; numerous nephews and nieces.

Memorial service will held in Pueblo, Colo. on Friday, June 19th at St. Pius X Roman Catholic Church at 11:00AM with inurnment to follow at Roselawn Cemetery. In lieu of flowers, donations can be made to Colorado AIDS Project, Development Department, 2490 West 26th Avenue, Suite A300, Denver, Co. 80211 or American Cancer Society P.O. Box 22718 Oklahoma City, Ok. 73123-1718.

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Tim Jackson, President of CADA, will be out of the office (and out of touch) this week as he takes on the 380-mile cycling loop, ascending three of Colorado's most scenic mountain passes.

CLICK HERE to learn more about this exciting ride.

Safe travels Tim!

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Have you or anyone else at your dealership won an award recently? Have you or your dealership provided any outstanding community service? We want to recognize such accomplishments. Please send us a brief write-up of the award or event along with any other information to milestones@coloradodealers.org. Also include your contact information for further follow-up.


  • Automakers defend dealership closures
    The Denver Post, June 13
    "Last chance" to save industry, says top GM exec
  • Lewis: Ousted Chrysler dealer will reinvent - again
    The Denver Post, June 13
    David Fitzgerald still loves Chrysler, even if Chrysler doesn't love him.
  • Local car dealers deserve answers
    The Denver Post, June 11
    Chrysler and GM should explain why they yanked the plug on successful dealerships. They need to regain communities' trust.
  • Auto-lease trading business is booming
    The Denver Post, June 11
    Auto-lease trading is becoming more popular among those who can't afford to pay off or purchase long-term leases in the midst of economic uncertainty.
  • Johanns: Congress should vote on auto bailout
    The Detroit News, June 4
    Sen. Mike Johanns, who said yesterday he would seek to block the federal bailout of GM and Chrysler without congressional approval, plans to introduce his measure today, his office says.
  • Another life for Chrysler
    Detroit Free Press, June 11
    Like a resourceful alley cat -- disrespected, kicked around by various owners, starving but tenacious -- the Chrysler automobile company appears to have cheated death once again.
  • Stimulus Winner Is Ford (Sorry, G.M.)
    The New York Times, June 10
    There was something almost quaint about it: the United States government was not buying car companies, but buying cars.
  • Fiat Deal With Chrysler Seals Swift 42-Day Overhaul
    The New York Times, June 10
    With the touch of pen to paper and a simple wire transfer, Chrysler completed its alliance with Fiat on Wednesday morning, largely ending its quick trip through bankruptcy.
  • Hoyer Would Require Car Companies to Stick to Dealer Contracts
    The Wall Street Journal, June 9
    House Majority Leader Steny Hoyer said Tuesday he strongly supports legislation that would require General Motors Corp. and Chrysler LLC to honor existing franchise contracts with dealerships the troubled car makers intend to close.

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Colorado Automobile Dealers Association
290 East Speer Boulevard Denver, CO 80203
Telephone: 303.831.1722 | Facsimile: 303.831.4205