Coronavirus Update

Jim Appleton Testifies On Dealership Safety Preparedness, Trade Groups Ask For PPP Flexibility & SBA Issues New Guidance

May 26, 2020

NJ CAR President Jim Appleton Testifies In Front Of Senate Special Committee

Assures Legislators That Dealerships Are Prepared To Meet
The Challenge & Operate Safely In A Post- Covid 19 World

NJ CAR President Jim Appleton spoke remotely at the first meeting of the Senate Fiscal Recovery Strategists meeting, a bipartisan group dedicated to working with the Murphy Administration and the Legislature to develop plans to restart New Jersey’s economy.“Car sales were off 70 – 80 % last month, and May sales are expected to be no better than half of what dealers saw in May of 2019,” Appleton said. “But dealers have told me, now that they are permitted to resume by-appointment sales activity in their showrooms, new car sales could rebound in June.”

In his testimony, Mr. Appleton noted that dealership service departments have been operating under strict CDC and OSHA guidelines since the beginning of the COVID-19 crisis and dealerships have applied these same health and safety measures to their showroom operations. Asked about the typical dealership’s ability to protect the health and safety of employees and consumers if a resurgence of the virus takes hold in the Fall, he reassured the committee that dealers will be ready.

“By stepping up online and remote sales capabilities, dealership sales can be permitted and where a visit to the dealership is required, consumers and employees can be protected,” he stated. “In other words, this doesn’t have to be an ‘either or’ situation: either shut down and be safe or open up and risk widespread reinfection. Now that we know how this virus works, retail businesses like car dealerships don’t have to be shut down; they simply need to operate safely and dealerships have already demonstrated that they can do so.”

Jim was joined on the panel by Tony Fernandez of Mahwah Buick-GMC -Cadillac, who spoke at length about the impact the shutdown has had on his business. Mr. Fernandez also sought to reassure the Senators that dealerships like his have already demonstrated they can operate safely by investing in PPE, implementing rigorous sanitization protocols for facilities and vehicles, and investing in online and remote retailing tools that will reduce the number of face-to-face encounters required to purchase and take delivery of a new car.

Last week New Jersey new car dealers were given the green light by Governor Murphy to carry out sales activities in showrooms, provided dealers follow strict CDC and OSHA guidelines designed to keep employees and customers safe. These measures include by-appointment-only visits, reduced occupancy in the showroom, explicit social distancing, careful use of PPE and extensive sanitization of vehicles and dealership facilities. Various other business advocacy organizations appeared on the panel, as well, urging the Senate Committee and the Governor to permit their membership to reopen under similar tight controls.

Trade Groups Contact Congress Asking For Flexibility In PPP

Automotive News reported that a broad coalition of national trade groups, including the National Automobile Dealers Association (NADA) recently sent a letter to congressional leaders asking for changes to the Small Business Administration’s Paycheck Protection Program that would provide more flexibility to participating small businesses. In the letter, the groups called for “emergency legislative and administrative action” to repeal the program’s requirement that 75 percent of the loan be used to cover payroll costs and 25 percent be used to cover mortgage, rent and utilities during an eight-week period.

SBA Issues PPP Forgiveness Guidance

The U.S. Small Business Administration (SBA) released new Paycheck Protection Program (PPP) guidance Friday night that provided some clarity on several loan forgiveness questions. The two new interim final rules build upon the loan forgiveness application and instructions released May 15 but they don’t make changes to either the eight-week period during which PPP funds must be spent to qualify for forgiveness or the rule requiring PPP borrowers to spend at least 75% of the funds on payroll costs to qualify for full loan forgiveness.

One of the new rules addresses requirements for loan forgiveness and the other outlines PPP loan review procedures and related borrower and lender responsibilities.