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President’s CornerBy Scott BrownI’ve always enjoyed reading the President’s Corner articlewhen the VAA newsletter comes out but I never thoughtabout how hard it is to actually come up with an ideaand write one. This is actually my second attempt. I reread my first effort and honestly, it was boring. So I deleted it.My oldest son got married last weekend and I’ve beenthinking a lot about my various families. The family I wasborn into, my work family and most importantly my wifeMaryBeth and my five children. That’s not right, it’s six kidsnow, including my new daughter-in-law!How does this relate to the VAA? For me the VAA is family. It brings a sense of community, of caring, of belonging.It is this sense of community that drives me every time I’vebecome involved in anything involving significant effort.If you stop to think about it, when you have fulfilled a notable achievement in your life it probably involved a coregroup of people. When you find the right group, don’tyou feel a responsibility to them? And don’t they returnthe feeling?These are the people that encourage you and guide you.The people you never want to let down. The people thatcheck up on you if you don’t show up, that push you todefine your dreams and demands you achieve them.When others tell you your goals are impossible, they encourage you. Your core group holds you accountablewhen you have a period of low motivation. They are acommunity. A family.What is my VAA family? The VAA is not the family I wasborn into; it is the family I chose. If you are reading this,you are a part of it. The VAA is an amazing group of shopowners, supplier members & of course Steve, our Executive Director. Truly the best of the best. When I joined theVAA I had no idea of the friends I’d meet. Now, when Ihave a problem or an idea I can pick up the phone orsend an email for help. There really isn’t an issue that faces us that someone in the VAA hasn’t successfully navigated.The number one problem I hear about when I speak toshop owners around the state revolves around employees. Mainly that shop owners cannot find suitable, motivated, skilled employees. I think the solution for each of usis to create, in our shops, the same type of caring, nurturing, uplifting atmosphere that we seek for ourselves.I don’t think of the techs, service advisors and cashiersfrom Cardinal Plaza Shell as employees; they are my family. We work and play together as a group. We spend agreat deal of time, effort & money on training & teambuilding because I truly want my family to have great careers and to be proud of where they work.To begin to solve the greatest challenges facing us asindividual shops or as an industry we must look to our colleagues while leading and developing our people. TheVAA is here to help.Until next time . Scott4DOL Issues Long Anticipated Final RulesOvertime RegulationsOn May 18, 2016 the Department of Labor (DOL) released the longanticipated final rules defining Overtime Exemption requirements, including guaranteed salary requirements, for the White Collar Exemptions- Executive, Administrative, Professional and Highly Compensated.Key provisions of the final rule are as follows:1) The new rule goes into effect December 1, 2016.2) The new guaranteed salary requirement is a minimum of 913.00per week ( 47,476.00 annually). This salary requirement applies to theExecutive, Administrative and Professional Exemptions3) For the Highly Compensated Exemption, the new salary requirement is 134,004.00.4) The final regulation establishes a mechanism to update the salaryrequirement level every three (3) years.Of noted importance, and as it relates to the Executive, Administrative and Professional Exemptions (Highly Compensated excluded), isthe ability for the employer to apply Non- Discretionary Bonuses andIncentive Payments (including a valid commission payment) to satisfyup to 10% of the guaranteed salary level requirement of 47,476.00.Please note that Non-Discretionary Bonuses and Incentive Payments,such as commissions, must be well defined and meet the DOL’s requirements under the regulation.The DOL did not change any of the White Collar Exemption dutiestests. Further, the DOL permits the compliant use of the FluctuatingWorkweek Method of Payment which is a pay plan that may be recommended for select positions/cases by SESCO.Otherwise, there are no other significant changes except for the following:1) Higher Education: Bona fide Teachers, Coaches, Graduate Assistants, and Academic Administrative Personnel: Each of these positionsis not affected by the new rules. SESCO clients in this sector shouldcontact us to discuss in further detail as each of these position termsare very well defined.2) State and Local Governments: The final rules does not alter the current requirements for state and local governments or subdivisionsthereof. The use of "Comp Time", hours of work provisions for policeand firefighters, elected officials and staff and legislative branch employees will not be affected.3) Non–Enforcement for provider of Medicare-funded services for individuals with Intellectual or Developmental Disabilities in residentialhomes and facilities fifteen (15) or fewer beds: Enforcement of thefinal rule is delayed until March 17, 2019 for those SESCO clients whomeet this definition of a Provider.Article continued on Page 11

VAA Convention SponsorsWe give a big Thank you to our 2016 Sponsors . We are grateful for this show of financial support to our Convention,and to the work VAA does every day. We ask our Dealer Members to show your thanks to this special group of VAAPartner Supplier companies whenever you can by giving them your business.Platinum SponsorsAdvance ProfessionalAutopart Intl.American Tire DistributorsCarroll Tire CompanyFederated InsuranceJustice Tire DistributorsNAPA Auto Parts /NAPA Richmond BDGMark WilliamsJason GraybillDave KavanahBill HoalAustin BondRon JusticeTom McClainGold SponsorsMohawk Rubber SalesParrish Tire CompanyTCI Tire Centers Inc.Brad SteigerDonn GrantClay WhittakerSilver Sponsors3-R Contracting, LLCAtlantic Tire DistributorsAutomotive Training InstituteBridgestone FirestoneContinental Tire CompanyCooper Tire & Rubber Co.Emanuel Tire of VirginiaFalken TireFisher Auto Parts & VendorsGoodyear Tire & Rubber Co.Hankook Tire USAHot Rod ProcessingKukuiMax Finkelstein, Inc.Michelin North AmericaMudlick MailMyers Tire Supply & EquipmentNexen Tire AmericaNitto Tire USAOld Dominion Tire DirectOlympus Imported Auto PartsPapco OilPirelli Tire LLCPugh LubricantsUnifirst CorporationYokohama Tire Corp.Lee ShifflettJim McCulloughDan KellyRobert PritchettCaitlyn HouriganJonathon LucasElizabeth KrajewskiJoe ArutaEd EmbreyCharley StudenyNick JonesEd MannTodd WesterlundKurt FeinswogShannon FullerTim RossTony WaughEdwin CorletoBill SkutulJon HaydenChapin HannaBryan PattersonHarrison GaylordMike HalseyMark LewallenCarl Casalbore5

VAA Trade Expo ExhibitorsService Bay Share Boogie"Big changes in service bay share are underway among majortypes of light vehicle repair outlets. Over 35,000 service bays wereshuttered in the U.S. during the past 10 years (2005 to 2015) despitethe car and light truck population surging by more than 15 million.""Although approximately 3% of service bays closed between 2005and 2015, bay loss was concentrated among just a few majortypes of service outlets. In fact, several major outlet groups expanded their bay count. This has significant consequences forwhere light vehicles are serviced in the U.S., as well as the strengthof major distribution channels supplying the car and light truck aftermarket."Fewer Service BaysCar and light truck repair outlets in the U.S. operated over 1.17million service bays at mid-year 2015, down approximately 35,000bays from ten years earlier. The service bay count declined acrossthe U.S. despite a 15 million-plus jump of vehicles in operation(VIO).Service Stations and Garages Increase Bay ShareService Stations and Garages operated the largest share of carand light truck service bays in the U.S. at mid-year 2015, an estimated 30%. Service Stations and Garages suffered a small loss inbay numbers over the past ten years, but their bay share expanded as a result of the shrinking universe of service bays.Vehicle Dealers Hit HardVehicle Dealers accounted for approximately 25% of light vehiclebays at mid-year 2015, down nearly 60,000 from their near-peakbay population ten years earlier. Dealers suffered over two-thirdsof the total light vehicle service bay loss during the past five years.Repair Specialists SoarRepair Specialists (outlets performing a limited menu of vehiclerepairs) accounted for the third- largest light vehicle bay share inthe U.S. at mid-year 2015 at 19%, up from a 16% bay share tenyears earlier.Repair Specialists added more than 30,000 bays nationwide between 2005 and 2015.Tire Stores Expand BaysTire Stores conducting light vehicle repair (in addition to tire salesand related tire repairs) held an approximately 11% service bayshare at mid-year 2015, up from 10% during 2005. Tire Stores added thousands of bays between 2005 and 2015 as their bay sharerose approximately one-tenth.Foreign Specialists Record Strongest Bay GrowthForeign Specialists (outlets forcing on foreign car and light trucknameplate repair, imports as well as transplants) operated nearly85,000 service bays at mid-year 2015, over 7% of all light vehiclebays.Foreign Specialists increased their bay count by 15,000 over thepast five years, elevating their bay share by nearly one-quarter.All Other Outlets FalterThe residual category of All Other Outlets operated less than 9% ofservice bays across the U.S. during 2015.The bay share of All Other Outlets declined over the past tenyears, reflecting the shuttering of more than 20,000 service bays bythis group of outlets.The category of All Other Outlets includes a wide range of serviceoperations, including Auto Parts Stores with bays, as well as Jobbers with bays, Discount Stores/Mass Merchandisers, and otheroutlets with light vehicle service bays.Article continued on Page 1163-R Contracting, LLCAdvance Professional / Autopart InternationalAmerican Tire DistributorsAndreoli & Associates, Inc.AP ExhaustAshcraft AssociatesAtlantic Tire DistributorsAutomotive Training InstituteAutoshop SolutionsBG Products & Services CrovatoCardone IndustriesCar-Part.comCarroll Tire CompanyChevron Products CompanyContinental TireCooper Tire & Rubber Co.Dayco RubberDorman ProductsEast Penn BatteriesEmanuel Tire of VirginiaExcel Tire GuageFalken TireFederal MogulFederated InsuranceFirst Data Merchant ServicesFisher Auto PartsGoodyear Tire & Rubber Co.Go PowertrainH. N. FunkhouserHankook Tire USAHeritage-Crystal CleanHot Rod ProcessingHunter EngineeringJustice Tire DistributorsKukuiKT Automotive ProductsMax Finkelstein Inc.Michelin North AmericaMitchell 1Mohawk Rubber SalesMudlick MailMorris DistributingMyers Tire Supply & EquipmentNAPA Auto PartsNet DrivenNexen Tire AmericaOld Dominion Tire DirectOlympus Imported Auto PartsOmni-United USA Timberland TiresOptimize Social MediaParrish Tire CompanyPapco OilPirelli Tire LLCPugh LubricantsR. O. WriterSchraderStandard Motor PartsTCI Tire Centers Inc.TCS TechnologiesTire Industry AssociationUnifirst CorporationGfkV2V Technologies Inc.

Scenes From VAA 2016 at The HomesteadDistinguished Member Award goes to Tony WaughEmmerson Miles, Matt McCoy also RecognizedDuring the Saturday evening awards banquet, we recognized Tony Waugh with the Association’s highesthonor, The Distinguished Member Award. In recognizing Tony, Executive Director Steve Akridge spoke ofTony’s many accomplishments with the VAA, including his serving on our Board of Directors for 22 years,numerous committees and as our President from 2001-2002. As Steve put it, “Tony has always been therefor us when we needed him”. Steve went on to say he met Tony for the first time at a VAA Board eventover 30 years ago, which has developed into a close friendship over the years. Tony, thank you for allyou have done to help the VAA, and congratulations on this very deserving recognition!At the same event, we recognized Emmerson Miles of Miles Auto Service in Richmond and Matt McCoyof M & M Tire in Blacksburg, for their service to VAA on our Board of Directors. (Matt was unable to attend the event).Matt McCoy has been on our Board since 2010, served several committees, and is the second generation from his family to serve our Board. His Dad, Mike McCoy was on our Board 20 years ago.Emmerson Miles has served on our Board since 2009 and was a member of our Legislative Committee.He joined us for countless trips to the General Assembly and testified before many committees, lendingvaluable opinions from a shop owner’s perspective.We thank Matt and Emmerson for the countless hours away from their business to serve the VAA as a volunteer leader on our Board.Emmerson Miles (L) is congratulated by Steve AkridgeTony Waugh (L) is congratulatedby Steve AkridgeThe SpeakersDanny SanchezBill FordDave CrawfordJohn Gamauf7

Peer to Peer Roundtable Draws a Lively DiscussionOne of the true values at our Convention, enjoyed by both dealers and suppliers, is the opportunity tocome together and openly discuss the issues that impact our industry. Moderated by John Gamauf, thisyear was no exception. The session is unscripted and open to anyone who wants to speak, and the over200 in attendance found plenty to talk about. Some of the subjects included recent sales tax audit experiences, some negative perceptions of the state safety inspection program (and an initiative the VAA will beaddressing this year), health insurance related issues, osha inspection experiences, hiring new technicianexperiences, credit card processing and chip readers, and cyber liability issues.Our Moderator, John Gamauf, giving some opening remarksMike Scaglione making a pointconcerning safety inspectionsTerry Westhafer discussing hissales tax auditEmmerson Miles makes a point to John GamaufFish Crawford takes advantage of some one onone time with John GamaufFederated Insurance’s AustinBond discusses cyber securityMore Scenes From VAA 2016 and The Homestead8

Scenes From the VAA Trade Expo & Reception80 Exhibit booths, over 420 attendees, 1500 cash given away, 4 open bars.quite a showAnd the winners are.L-R: Kim Dillon of Buena Vista- 100, Marggie Ortiz of Fairfax- 200, Jake Haddon of Midlothian- 300, Preston Battle ofEmporia- 400, and Chuck Shifflett of Charlottesville- 500.9

Scenes From The VAA Open at The Homestead Old CourseIt was a beautiful spring day at The Homestead, as 21 teams competed in the VAAOpenThird Place Team was 1 shot behindL-R: Larry Pindell, Dave Crawford,Bill Isenhart, Mike LittleLong Drive WinnerMike Holmes“Man, this guy can putt”John MillerThe 2016 VAA Open Champions shot 12under. L-R: Larry Brooks, Adam Cornwell,Donn Grant, Jason GraybillBuilt in 1892, the #1 teebox at the OldCourse is the oldest teebox in continuoususe in AmericaClosest to the Pin winnerMike HeatwoleThe Open Runner up team also shot a net60. L-R: Mac Ellet, Danny Sanchez, PatrickLittle, David LittleThe VAA Golf Committee hard at work.L-R: Clint Farrar, Fish Crawford, Ed EmbreyClosest to the Pin winnerSteve RolandL-R: Jonathon Lucas. Nick Jones, Ron Justice,Jim McCullough“Oh well, someone has to finishlast”. L-R: Mike Bowles and FrankWard. Not pictured: Aric Tobloeskiand Caleb Van DemanL-R: Fish Crawford, Jerry Tatum10

Lang Research article continued from page 6Expanding Independent Bay ShareIndependent outlets expanded their service bay share between 2005 and 2015, climbing from 71% to 75% of all carand light truck bays.Repair Specialists increased their bay population over30,000 during this ten-year span, while Foreign Specialistsadded approximately 15,000 bays.Tire Stores increased their bay operations by 5,000 from2005 to 2015.Service Bay DeclineDealer service bay share fell from 29% to 25% as Dealersclosed nearly 60,000 service bays during this period.The residual category of All Other Outlets slipped from123,000 to just over 100,000 bays over these ten years.Service Stations and Garages bay count fell nearly 7,000from 2005 to 2015.Six Major Takeaways Although total VIO (vehicles in operation) increased by more than 15 million between 2005 and 2015,the light vehicle service bay population across the U.S. fellmore than 35,000. Service Stations and Garages increased their bayshare over the past ten years, climbing from 29% to 30% oftotal car and light truck service bays. Repair Specialists alsoexpanded their bay share, expanding from 16% to 19% ofall service bays nationwide. Foreign Specialists recorded the largest relativeincrease in service bay share over this ten-year span, increasing from less than 6% to over 7% of the light vehiclebay population. Tire Stores recorded a moderate increase in bayshare, representing 11% of the service bay population atmid-year 2015, up from 10% share ten years earlier. Vehicle Dealer bay share fell from 29% to 25% between 2010 and 2015, while the residual category of AllOther Outlets sank from 12% to 10% in bay share. Independent (non-Dealer) service bays increasedfrom 71% to 75% of all car and light truck service baysacross the U.S. during this ten-year span. This had a significant impact on the strength of major types of repair outletsand the product shares of individual distribution channelssupplying the light vehicle aftermarket.The Final VAA 2016 GeneralAssembly Report will beEmailed the week of July 18.Please look for it in your Inbox.Sesco article continued from page 43) Non–Enforcement for provider of Medicare-fundedservices for individuals with Intellectual or DevelopmentalDisabilities in residential homes and facilities fifteen (15)or fewer beds: Enforcement of the final rule is delayeduntil March 17, 2019 for those SESCO clients who meet thisdefinition of a Provider.SESCO Staff Recommendation- What Employers ShouldDo NOW!1) Assess your organization’s current liability by conducting a thorough review of salaried positions. Discuss andconfirm appropriate application of the White Collar Exemptions based on the duties test alone.2) Assess the hours of work performed by those salariedpositions of which their current salary is less than the newguaranteed salary requirement. Determine if the position(s) can be limited to 40 hours of work or less per workweek.3) If necessary, and based on if hours worked exceed 40in a work week (overtime), consider altering the position’scompensation structure to ensure compliance: Increase the guaranteed salary to the new requiredthreshold of 47,476.00.00 ( 913.00 per week). It is important to note that simply increasing the salary may notmake the position exempt from overtime. The positionmust also meet the duties tests as outlined in the WhiteCollar Exemptions. Change the salary to an hourly rate of pay with overtime (1½ times the regular rate of pay) for any hours thatexceed 40 in a work week. Implement the Fluctuating Workweek Method of payment. This method of payment provides a guaranteedsalary per week with a straight time earnings calculationproviding half (1/2) time for hours that exceed 40 in awork week. Please contact SESCO if you wish to discussthis method of payment further. Revise the current pay plan implementing a NonDiscretionary or Incentive element applying up to 10% tothe salary threshold. For Retail Organizations, implement the partial Retail 7iexemption from overtime. This partial exemption requiresthat the employee earn at least half (51%) or more of thetotal compensation from a Non-Discretionary Bonus orIncentive pay plan. Further, the position must yield anhourly rate of pay of least one and one half (1½) timeminimum wage (or 10.88/hour) for all hours worked. Thispartial exemption does not remove the requirement foran employee to maintain a true and accurate time cardfor all hours worked.4) Contact SESCO to schedule a Wage and Hour compliance audit at (423) 764- 4127 or sesco@sescomgt.com.As a member of VAA, please call us to explore this exclusive offering which will provide the audit and ongoingtelephone/email support.11

Tom Jones, Fisher Auto Parts, Staunton Larry Williams, University Tire & Auto, Charlottesville Express Auto Service, Dan Richie Fredericksburg VAA Sponsor: John Kline Kukui Corporation, Kevin Utile San Jose, CA VAA Sponsor: Steve Akridge Capital Car Care Inc., Scott Stern Springfield VAA Sponsor: Scott Brown