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March 8, 2013 Here is what you will find in this edition:
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EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS!
NJGCA TALKS HESS DIVESTITURE --
-- AND SLIM PROFIT MARGINS ON GAS! MULTI SITE RETAILER GETS SLAPPED HARD BY USDOL -- -- SERVES AS A WARNING TO ALL MEMBERS! This week you probably heard the announcement that Hess will sell their retail business. The news sparked a flurry of news coverage, including a stint on Fox Business featuring yours truly. If you didn’t receive the In Case You Missed It message from us on Wednesday highlighting our response to the Hess divestiture, CLICK HERE to view it now. The significance of the story is that even for a big company like Hess, it is extremely difficult to make a profit in retail gasoline sales because margins are so slim. My experience on the program was overwhelmingly positive. However, just as I was entering the studio, there was breaking news that Venezuelan President Hugo Chavez had succumbed to his two-year battle with cancer. Thankfully the producers still wanted to include my segment in the program, but my time on camera was cut in half in order to accommodate the rest of the news. The time I was allotted, however, was still enough to drive home the point that retailers make slim profits which of course is the underlying reason that Hess is getting out of the retail gasoline business. That last part isn’t an exaggeration. Just like other major brands that have recently divested their retail businesses, the stockholders at Hess no longer want the retail side of their business to drag down the overwhelmingly profitable side of oil exploration and production. In the gasoline retail market, those profits can be elusive, and even Hess was struggling. Hess is one of the oldest names in the business and they’ve been an east coast staple for decades. Long-time family patriarch, Leon Hess, was born in Asbury Park and was posthumously inducted in the New Jersey Hall of Fame in 2011. According to legend, the original Hess Oil & Chemical Company lent its green and white brand-colors to the newly-renamed New York Jets football franchise in 1963, after Hess participated in a syndicate that purchased the team. And, of course, the company is famous for selling their Hess Truck toys during the Christmas holiday to the delight of children all over the northeast. A news report earlier this week said that Hess is reorganizing the company to focus on the exploration and production side of their business – which is infinitely more profitable. In fact, a New York Times piece stated that Hess makes only about 4-percent of its total revenue off their retail business. If your books looked like that, you’d probably sell your gas operations as well and focus all of your attention on auto repairs or convenience stores. And in fact, though you may not control a sprawling retail empire, many of you have had to make the difficult decision to terminate a part of your business in order to focus on more lucrative operations. Consider how many NJGCA Members have removed tanks from their locations only to keep a repair business open? How many others have kept their pumps going but closed their repair garages in order to open a convenience store? Your business moves may be smaller, but the choices you make impacts your business -- and your community -- just the same. On Thursday, the United States Department of Labor (USDOL) made some headlines when they forced a well known multi site retailer to pay over $3 million in unpaid overtime, and liquidated damages, and fines. CLICK HERE to read more about the situation in an official USDOL Press Release. Perhaps if this multi site operator had maintained his NJGCA membership in good standing, that he would have read all of my past warnings and advice. Maybe he might even have attended the two day seminar with USDOL officials to teach you exactly how to comply with the law without paying more for payroll. I haven’t been beating the drum quite loud enough, but now is a perfect time for me to restart and repeat: THE USDOL STILL HAS A TASK FORCE IN NJ THAT ISN’T LEAVING UNTIL THEY VISIT EVERY GASOLINE SERVICE STATION AND AUTO REPAIR SHOP IN THE STATE! It may take them a few years to visit every site, but they vow to do so. They have been here for over 2 years and because they have found such a high percentage of gas stations that do not comply with the labor laws. It is important that you understand that they aren’t going away anytime soon. So if USDOL agents haven’t visited your site yet, they will. They are incredibly thorough, and I cannot foresee them abandoning their task before it is complete. My job is to educate you so that you understand exactly how to comply with the law. In the past, I have asked any Members not in compliance with federal law to take active measures to conform to labor and compensation standards. You can review a few of the past Road Warrior communications on this topic below:
July 15, 2011: Oil prices, USDOL Followup & More
July 22, 2011: On The Road in your mailbox, USDOL, Meetings with Legislators and more February 3, 2012: USDOL not going away, MVC finger print biometrics, and More! February 17, 2012: Alternatives and the Market Place Rollercoaster Again, if you haven’t done so already, it is my strongest recommendation that you make the required changes in managing your payroll. As can be seen from the USDOL Press Release above, they mean business. Getting slapped with over $3 million in past wages and fines is enough to close anyone’s doors for good. Why risk that from happening? Now before anyone gets bent out of shape about the government coming down on you or interfering with how you manage your employees, you should remember that such a principled position is a separate argument for a different forum. When I’ve had past discussions with federal agents and regulators on this topic, I’ve made my views known and have voiced my opposition to the current standards. However, the agents from USDOL aren’t policy-makers; they are policy-enforcers. Whether you agree or disagree isn’t material; only your compliance is. If you feel as strongly as I do about the rules, then you should be working with me (and other pro-entrepreneurial groups) to change them in Congress, the court of public perception, and beyond. But if they come knocking on your door, it’s the wrong place and the wrong time to debate. You should remember that USDOL agents are professionals who aren’t unwarranted for going after service stations. When the taskforce first began their work, they found almost 90% of the gas stations and auto repair shops they investigated, were out of compliance. In enforcing these laws, they are trying to change a culture that has run rampant in New Jersey – nothing more. Besides overtime violations, USDOL is continuing to find employees paid under the table so they can pay lower wages with no overtime, and not paying taxes. When honest small business owners like you play by the rules, you are making the conscious decision to fairly compete with a competitor down the street. When that competitor abandons the rules and ignores the law, he or she gains an unfair competitive advantage. That advantage could drive more customers to their location and pick your pocket for the profits that keep you afloat. Is that right? You know the answer. I have spoken to a number of Members and non-Members who have not only refused to make the required changes, but seem to think they won’t get caught. I’m utterly disappointed in those business owners and even more upset that they aren’t reading these weekly Road Warrior communications with the warnings and details they hold. I guess I have to accept the fact that I can only send you the information; I cannot force you to read it. But know this: If you get caught, I will not defend any small business owner who knowingly ignores the rules and the warnings NJGCA has repeatedly sent you. Lastly this week, I want to alert you that we’ll have another follow up on the credit card surcharge situation next week. There has been a major committee hearing on interchange fees and we’ll fill you in on the details in the next edition. ADDITIONAL REMINDER: As we’ve stated recently, Motor Fuel Licenses may be expiring on March 31st and must be renewed. The NJ Division of Taxation sent out a renewal letter to all current licensees who expire in 2013 last December. The letter advised licensees to go to the NJ State Treasurer website, print out and complete the MFA-1 form, and return it with your $150.00 license fee payment. All renewed licenses are good for 3 years. You visit the Treasury’s Motor Fuel Tax Form page by CLICKING HERE or download the MFA-1 form directly by CLICKING HERE. If you have any questions, please contact Debbie Hill at debbie@njgca.org or at 973-376-0066. Thanks for reading – See you next week! Regards,
Sal Risalvato
BUSINESS FOR SALE! If you'd like to list your business for sale, publish a location you're selling, or are seeking a business partner for your establishment, please contact NJGCA at 973-376-0066!
CLASSIFIEDS: FOR SALE & HELP WANTED! After running an ad in the Road Warrior over the last month, NJGCA was able to assist a member in selling his equipment! If you'd like to list equipment for sale, or have an open position you'd like to make other industry professionals aware of, please contact NJGCA at 973-376-0066 and let us help you get the word out!
NEWS AROUND THE STATE: THE NEWS YOU SHOULD KNOW
03/07/2013:
Busted: Service station operator fined over $3 million by USDOL The U.S. Department of Labor recently handed down hefty fines and ordered millions in lost back-pay to employees as part of a wider effort to stamp out violations of the Fair Labor Standards Act. The New Jersey business owner will also be subjected to extensive monitoring by USDOL. To read the full article about the situation, click above. All NJGCA Members should view this as an example of what NOT to do in operating your business and how severe the penalties are for non-compliance. 03/07/2013: State revenues for February ahead of projections The NJ State Treasurer has reported that state revenue collections for February are 9.5 percent above projected forecasts. The new revenue comes via higher sales tax and income tax collections. The report is welcomed news to the Christie Administration, which has been criticized by pundits for revenue shortfalls throughout the current 2012/2013 budget year. To read full details, click on the link above. 03/04/2013: NJGCA in the News: Blomgren testifies on cigarette smuggling Eric Blomgren, NJGCA Government Affairs Assistant, recently testified before a State Senate panel on cigarette smuggling. Eric outlined why NJGCA and honest small business owners should support efforts to combat cigarette smuggling and how it harms competition in the market place. Click above to read what Eric had to say! 02/27/2013: Groups insist on further testing of E15 ethanol blend Though the EPA has already signed off on the use of E15 (a blend of 15 percent ethanol and 85 percent gasoline) in motor vehicles, some consumer groups and members of Congress as asking that federal government to halt its implementation. Critics state that the EPA didn’t properly handle the approval and that new studies have underscored the potential damage to vehicle engines. Some automakers, including Chrysler Group, have yet to sign off on approving E15 for use in their vehicles, giving some consumer advocates pause that vehicle warranties will be voided if the fuel were used. Click above to read the full article.
TRAINING CLASSES!! PLEASE NOTE: FUTURE DATES WILL BE ADDED UPON REQUEST AND ACCORDING TO DEMAND. CONTACT DEBBIE at 973-376-0066 or DEBBIE@NJGCA.ORG TO LET HER KNOW YOU ARE INTERESTED IN TAKING A SPECIFIC CLASS. THIS WILL ALLOW US TO GAUGE YOUR NEEDS AND KEEP TRACK OF THOSE WISHING TO PARTICIPATE!!
MEMBER BENEFIT PARTNER MESSAGE
TMP Energy Solutions We have had a number of NJGCA members successfully reduce their rate per kWh signing up through our energy saving program. We know it’s difficult to collect 12 months worth of previous electric bills to get an “accurate” analysis when comparing a variable rate to a fixed rate, but we now have another option available. This new solution is a power purchase option; the other program is still in full force and has saved members thousands of dollars. If you sign up for the power purchase option, you will be grouped with other NJGCA members until the minimum KW demand is acquired. By pooling the member’s usage together, you will be able to take advantage, as large energy users do, and receive a lower kWh rate. Each member will receive their own contract. Each member is responsible to sign and return the agreement the day it is received in order to secure the price for their group. Please do your due diligence, so when you receive the proposal and the agreement you will be able to make an intelligent decision. If by chance, you still want us to assess you bills, to give you a price to compare, we will require12 months of your most recent utility bills. There are no bills required, but we would still like to have one bill per meter on file to check account #’s, meter #’s service addresses and other pertinent information incase there is a problem. The term of the agreement is for 12 months. During this term period, you will have price protection against any energy price increases along with a low fixed kWh rate. If you are interested in becoming part of this power purchase option, please contact Greg Cannon at the NJGCA. Remember when you sign up your energy through the NJGCA Energy Program, TMP makes a considerable donation to the NJGCA Scholarship Fund through their proceeds. This has no affect on your rate, and costs you nothing out of pocket. We hope to help hundreds of NJGCA members reduce their utility costs by participating in this and our other cost reduction programs. Our purpose, in the endeavor, is to help NJGCA members lower their energy costs while supporting the NJGCA Scholarship Fund. Contact GREG CANNON at 973-376-0066 or email Greg at greg@njgca.org. Mention that you are interested in saving money on your energy bills. NJGCA & TMP Energy Solutions will handle all the rest.
POLITICAL PARTICIPATON: THE NJGCA PAC
Promoting our agenda in Trenton is of utmost importance to NJGCA and our members.
To truly understand the importance of supporting our allies, consider our successes in Trenton:
We defeated BELOW COST SELLING We made history in getting FIRST RIGHT OF REFUSAL signed into law! We have built large support for RIGHT TO REPAIR and got it passed out of the Assembly We defended your small business against the false accusations of Attorney General Anne Milgram We gained wide support to move New Jersey to an all PIF Inspection System and close the CIF lanes ...and MUCH MORE!! In each instance, we achieved these goals with the help of our friends in the Legislature! If every member contributes just $100.00 we will be able to provide the help necessary to ensure victory for our allies.
PLEASE SEND YOUR CONTRIBUTIONS TO: I understand that times are tough for all NJGCA members, but this is just as important as any battle we have fought in the past. We have made great progress in Trenton. I hope that you will answer the call.
THE MEMBER TOOL BOX
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