Automotive News Canada - July 2021 - 29

* JULY 2021
29
Buying a group
would give Lithia
an instant Canadian
knowledge base
CONTINUED FROM PAGE 3
tools in these data feeds to
automate the selling process, "
he said.
DIFFERENT CHALLENGES
DeBoer said in 2018 that
Lithia's ambitions for the Great
White North could fund further
technologies and expand the
dealership group.
" We've spent a fair amount
of time looking over the border, "
DeBoer said.
While Lithia has
closed on some of the
industry's largest acquisition
deals in recent
years, purchasing foreign
dealerships poses different
challenges.
Canada has
few large groups
for Lithia to
acquire, and
most large
retailers in
major markets
are looking to
expand themselves,
said
Farid Ahmad,
CEO of Dealer
Solutions
Mergers and
Acquisitions,
based in
Toronto.
He said
Lithia's best
bet would be
to purchase
one of those
groups to act
as an anchor,
Canada has a much smaller
population, roughly that of
California, where Lithia has
47 dealerships, according to
its website. In Canada, new
light-vehicle sales were 1.8 million
in 2020 compared with 14.6
million in the United States.,
according to the Automotive
News Research & Data Center.
The market in Canada is
far more nuanced than
many of the states in
the United States. For
example, there's no
significant franchise laws
protecting the dealer
with lobby groups like
they do in the U.S.
PAUL ANTONY
Executive Chairman,
AutoCanada
much like it did with its move
into the Michigan market with
the purchase of the 34-store
Suburban Collection in April,
and then work to make smaller
deals over time.
" They would have to go after
one of these sizable groups and
pay a lot of money to get that
scale, " said Ahmad, who noted
that he has introduced Lithia
executives to Canadian dealership
group leaders in recent
years.
DeBoer addressed such a
strategy back in 2018.
" It wouldn't change our
return expectations by moving
to something that's more
risky, because it is more risky
to move international when
you're not there, " he said then.
" We need to find a partner
that has enough space to leverage
their people and the culture
they know about that country,
to be able to grow from. "
Still, the landscape for consolidation
by a public group is
sparser in Canada than in the
United States.
MANUFACTURER CONCERNS
Automakers' Canadian
operations also have more
leverage over their dealerships
than their U.S.
counterparts
and are less
accepting of
public-company
ownership.
Until 2018,
Ford Canada
and General
Motors Canada
blocked public
companies
from buying
dealerships.
Honda
Canada has
reversed its
opposition to
public ownership,
saying it
will now consider
allowing
a public retailer
to purchase
" ownership
interest " in a
Honda dealership.
A
spokesman
for Toyota
Canada said
the automaker doesn't have
a specific policy about public
ownership of its dealerships,
and that the company evaluates
each application on its
own merits.
As for AutoCanada, the
country's only public dealership
group, incoming competition
could be beneficial.
Executive Chairman Paul
Antony said in May that the
retailer would " welcome "
direct competition from another
public group but cautioned
that newcomers from south of
the border might encounter
hurdles.
" The market in Canada is
far more nuanced than many
of the states in the United
States. For example, there's no
significant franchise laws protecting
the dealer with lobby
groups like they do in the
U.S., " Antony said.
" But I think it will also be a
huge vote of confidence in our
thesis that dealership consolidation
in Canada provides a lot
of opportunity. " - ANC
Arbitrator: Lube tech's
lead foot didn't merit
him getting the boot
By ERIC FREEDMAN
LEGAL CORRESPONDENT
A NEW BRUNSWICK DEALERSHIP HAS
been ordered to reinstate a service employee
after an arbitrator ruled that the store
was too tough in firing the lube technician,
who drove a customer's car too fast and
squealed the tires.
Arbitrator Michael Doucet held that
Moncton Honda was justified in disciplining
Lance Lagacé but said a one-month suspension
was the appropriate punishment
for his misconduct.
The dispute arose from a July 2020 incident
involving a vehicle being serviced
with an oil change and new tires. Lagacé
drove it into the shop, loaded the tires and
drove out of the shop and around to his
workstation to change
the oil.
As he did so, he
accelerated to see
" what was the pickup
of the car, " the April
12 decision said.
The customer witnessed
the incident
but didn't file a complaint.
However, two
co-workers reported it. When the service
department manager asked him about it,
Lagacé immediately admitted what he had
done and apologized.
The store fired him for abusing the customer's
car, and Unifor filed a grievance on
his behalf.
Doucet ruled that Lagacé deserved
the suspension. " Although no accident
occurred, there is no question that his
conduct potentially put the safety of his
coworkers and that of the dealership's customers
at risk. The employer has a legitimate
interest in ensuring that its employees,
when driving their own vehicles or
vehicles of its customers, do so safely. "
Although Lagacé had received two warnings
regarding his performance and attitude
during his year on the job, termination
was excessive under the circumstances,
Doucet said.
RETAILER WINS GRIEVANCE OVER TECH PAY
A RICHMOND, B.C., DEALERSHIP'S method
of paying technicians does not violate
the store's collective-bargaining agreement,
according to an arbitrator who rejected a
grievance filed by Unifor Local 114.
Unifor unsuccessfully contended that a
change in management at Cam Clark Ford
Richmond in 2019 also changed the way
technicians are paid without notifying the
union.
At issue is whether the contract guarantees
a minimum 40-hour payment, as the
union claims, or a flat-rate system under
which technicians get paid per job, as Cam
Clark Ford contends. The store said a small
part of technicians' pay is for straight time
for nonflat-rate work.
In an April 6 decision, arbitrator Cathy
Knapp sided with the dealership, finding
that the contract requires technicians to
be present for 40 hours a week, but that
amount of time " has no correlation " to
their pay rate.
In addition, she said, a flat-rate system,
which has been the dealership's
" long-standing practice, " is " in accordance
with industry practices. "
No appeal will be filed, and the union
and dealership are preparing to negotiate a
new contract.
COVID LAYOFF RULED WRONGFUL
A FORMER ASSISTANT SERVICE
manager laid off by a British Columbia
Mercedes-Benz store because of a pandemic-related
drop in business is entitled to
damages for wrongful dismissal, according
to a provincial Supreme Court ruling.
Justice Laura Gerow rejected MercedesBenz
Vancouver's argument that Terence
Hogan had failed to take reasonable steps
to minimize his damages by rejecting a lower-paying
position at another store owned
by the same dealership group.
Hogan was hired by the dealership as a
technician in 1998 and was promoted to service
adviser in 2008 and to assistant service
manager in 2013, according to the May 28
decision. In 2018, the Dilawri Group of Cos.
acquired the franchise.
In March 2020, due to COVID-19, business
dropped substantially, and " all but
essential service appointments were, for
the most part, cancelled by customers, "
the decision said. Hogan and other employees
received temporary layoff notices that
month, and he was dismissed in August
with $13,255 in termination pay.
Gerow ruled that Hogan is entitled to
damages based on an $85,800 annual base
salary, minus payments from the Canadian
Emergency Response Benefit. Hogan had
reasonable concerns in turning down the
alternative job, the justice said. The two
sides were negotiating damages.
FIRED EMPLOYEE AWARDED DAMAGES
A DEALERSHIP IN LANGLEY CITY, B.C.,
wrongfully dismissed a 68-year-old service
dispatcher after he objected to a lack
of social distancing and COVID-19 protective
equipment in his office, a provincial
Supreme Court judge has ruled.
Justice Elaine Adair's June 1 decision
ordered Preston Chevrolet-Buick-GMCCadillac
to pay Robert Ehman $23,685 in
damages.
" There is no dispute that Ehman was
dismissed, that his dismissal was without
cause and that he did not receive reasonable
notice " in August 2020, the ruling said,
adding that Ehman acted reasonably to
mitigate his damages by applying for more
than 90 jobs.
Ehman became a service dispatcher or
" tower operator " in 2007, responsible for
controlling and distributing the flow of
work to Preston's service departments, the
decision said. He shared an office with a
foreman and the store's other tower operator.
After
British Columbia declared a state
of emergency, Ehman spoke with the dealership
president about questions that might
arise from physical-distancing requirements,
the cramped office and how employees
could maintain sufficient distance
between each other, the ruling said.
Adair based the damages on Ehman's
contractual three-day work week rather
than the temporary one-day-a-week schedule
he had agreed to before the layoff. At
the time of his layoff, no plexiglass barriers
or physical distancing was in place, measures
that were implemented after he left,
the justice said. - ANC
Automotive News Canada - July 2021

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