VW vs The Union, Dealership Cybersecurity Survey, Tesla Crime Cameras

Kyle Mountsier: 0:04

When they call lucky John got my ocean life was so hard. It made me weak. Apparently it was a little it was a little tight on the music today. I don't know where that came from. We got the we got halfway through the song on the music. But welcome into the show this morning. That wasn't the normal start as you know it. It wasn't for me either. I don't know what's going on, but welcome to the show. Steve Greenfield, we are, we are live and ready to rock

‍Steve Greenfield: 0:30

a little caffeine for the morning. There we go.

Kyle Mountsier: 0:32

Man, that just came in. I don't know what was going on with my trigger pad. You know it's, it's, it's a weird one every morning, but man, Steve, thanks for joining us this morning. I know that you're you're always on the move. Where are you today? And some people may recognize where?

Steve Greenfield: 0:47

Yeah, you might recognize that building behind me. I mean, my head's in the way here, but that might look familiar to some folks. They call it the pagoda up here, not surprisingly. But maybe we should have people guess where, where I am today. So somewhere in the Midwest, and it involves racing.

Kyle Mountsier: 1:02

I like it. I like it. We'll leave it for the guests. And if you know where he's at and you're only listening to the audio, hit us at crew, at asotu, maybe we'll like send you a sticker or something. We'll see. There you go. Hey, before we get into the show today, just want to mention, you know, we've been dropping all of these podcast episodes on our in the dirt podcast from the name ad conference. And yesterday we dropped a podcast interview that we got to do with Julie Herrera, who is an incredible dealer, one of the largest Texas or one of the largest Toyota dealers in the country, talking about giving back to others and just her passion for things that are all about people. So Julie is one of those people after our own heart. Do you know Julie? Steve?

Steve Greenfield: 1:53

I don't. I don't. I heard her name a number of times, but I don't think I've ever met her. You

Kyle Mountsier: 1:56

would absolutely love her and and she's, she's smart as can be, but cares and has an incredibly huge dealership. So you can imagine what it takes to be one of the largest Toyota dealerships in the country. So all right, let's get into it. We've got, we've got a few stories for you here this morning. The news cycle's a little bit tough, but you know, we'll get to it. The Volkswagen CEO Oliver Bloom is on a collision course with Germany's powerful labor union IG metal, as VW considers job cuts and plants closures to reduce costs, they may be ending a 30 year old job security agreement and close these plants in Germany. They haven't closed the plant since 1988 and the union is vowing to, quote, fiercely resist any closures. VW works council head Daniela Cavallo says the upcoming worker management meeting will be very uncomfortable. We know a little bit about that here in the US. Analyst Matthias Smith commented, if bloom can make the move stick. Decades of past CEOs will feel vindicated. So there's a little little bit of tough blood over there in Germany going on right now, one that we kind of know about a little bit. Yeah. I

Steve Greenfield: 3:13

mean, we're going to see more of this globally, right? I mean, I think that the compounding of the threat of the Chinese coming into markets like Europe and, you know, combined, combined with the questions around the movement from ice to electrification, and you know, a lot of these manufacturers, Volkswagen, included, have to step back a few steps, right? I mean, of oval we heard earlier this week as well. But you know that combination, and you know, Volkswagen, most notably, you know, has spent billions of dollars on their software division, carry ad, and now they've laid off, you know, 1000 of their software developers. So I think that the big automakers are going to be feeling the heat here. They're going to need flexibility with labor, and that's going to run headlong into some of these unions, and you're going to see more of this is only the beginning.

Kyle Mountsier: 3:57

Yep, yeah, I agree. And even as like the EU is starting to totally change their tune on how they're handling tariffs and and bringing vehicles from Chinese manufacturers, including Tesla, so there's just going to be pressure from outs, from net new OEMs, because the the EU is willing to kind of Play Ball reduce costs for those coming in into that area. So you're going to see, yeah, I think you're going to see more and more of this, like cost cutting measures and potentially unions. You know, we saw this last year with the UAW, and then, you know, actually there was a story today that the Altium plan in Tennessee is also is partnering with the UAW. So you got something different happening on on US soil, right? We're going to see this battle over these next couple years for sure.

Steve Greenfield: 4:50

Totally agree. Totally agree. Uh,

Kyle Mountsier: 4:53

speaking of a little bit of a battle. Segue time. Consumers are starting to have a battle in their minds with whether or not they want to shop online. It seems like cybersecurity is becoming a lot more important. We know a thing or two about that in in auto, with 80% of consumers expressing concerns in a survey by Experian, the data shows dealerships need to prioritize security, obviously in their digital retail platforms, as online fraud and data breaches arise. Identity theft is obviously a top concern for consumers. The digital processes at dealerships have become targets for fraudsters due to weak cybersecurity, so things like digital retail or anything online retailing being targets because of the lower security measures taken by them, the survey shows that consumers want digital retail tools to take cybersecurity seriously, things like adding physical biometrics, PIN codes, behavior by Behavioral biometrics, security questions and passwords, because they said, Can Can China, Sundaram, I'm going to mess that up an experience. Experience said, consumers want easy, secure transactions with trusted brands like Amazon. Interesting that the Amazon word was thrown in there with with retail transactions?

Steve Greenfield: 6:20

Yeah, imagine that. Imagine that. Yeah. Listen, I think that we, we've reached Pandora's box here, right? This the CDK payout. And we don't know what that is, but it's got to be in the 10s of millions of dollars to these sort of Black Hat operators overseas. Has opened the the eyes of probably the world, hackers around the world, to say, hey, automotive is a big space, right? We've had some dealer breaches as well. They've been a little bit of hush hush, but at this point, I think that there's much more aggressive phishing scams for all employees at dealerships. I mean, you know better than me. I mean the deep fakes now both audio and video are getting much sophisticated. So you know, if a BDC rep gets a voicemail from the general manager and it sounds like the general manager asking them to go online and buy some amazon gift cards or something, this is going to be very, very common, and there's going to be all kinds of challenges, I think, from phishing scams, email phishing scams, et cetera. And we've only just started seeing the beginning, and I think now the hackers around the world suddenly say, oh, automotive interesting. You know, it's like you've got a lot of frontline employees at a dealership who aren't necessarily schooled on state of the art phishing scams that are vulnerabilities into their systems. And I think that the software vendors out there should be very concerned dealers, dealer groups should be very concerned. And I think, honestly, I said, as it sounds, we've only seen the beginning here,

Kyle Mountsier: 7:45

yep, well, and if you think about even just the digital retail transaction, this desire for an end to end purchase process that's available online, right, just the you know, what's the login, authentication? What's the documentation, authentication? Are we using things like clear? Are we using things like bank, connect, that have a lot of authentication procedures? Are we? Are we requiring two FA in our digital transactions? Are we, you know, especially like past keys, not passwords, where biometrics are involved, like these are things that, I think especially software providers, and then dealers should be asking of their software providers if they're developing to because, you know, when you get that golden, you know, that golden thing in the sky of here's a transaction, and it can be submitted to a bank and a loan executed on a clean transaction, like, what, what was done to put in place the measures of of risk on credit, and of the transaction data and all of that. So it stretches in both ways and something we should just be keenly aware of. But like you said, it's, it's, it's Pandora's Box, which is, it's a scary thing.

Steve Greenfield: 8:57

It's a new world. It's a new world. Speaking

Kyle Mountsier: 9:00

of being a new world stop segway, did you ever think your car could be impounded, not for something that you did wrong, but someone else did wrong? Tesla century mode is gaining attention in Oakland As police are utilizing the technology to aid investigations initially designed to catch Tesla related crimes, it is now helping police capture general crime scene footage. So Tesla launched this century mode in response to break ins in 2018 and 2019 and uses Tesla's existing cameras to record the car, record around the car while it's parked. It's been pivotal in solving like vandalism and other other car, non car related crimes. But now police are towing Tesla vehicles to retrieve footers when owners are unavailable. So just like, can't get the owner, go get the car. Go get the footage. Sergeant Ben tharald of the. Oakland Police Department admitted this practice may seem extreme, but justified when evidence is crucial.

Steve Greenfield: 10:07

Yeah, this is like, this is very big brother. This isn't going to work because, okay, let me draw analogy. So, hey, Kyle, you get a call from the local police department and they say, Hey, you guys were up for dinner last night, and at the restaurant there was a crime committed. Can you bring in your phone? Because we want to log in and see if there's any footage off your phone that might help us with the case. I mean, it's just not going to work at all, right, so you can't go confiscate a neighbor's car who had nothing to do with the crime just because their car happened to be co located with the crime scene and might have video. I mean, I could see them going and negotiating with Tesla maybe to get the consumers permission to get video, but you can't go, like, tow a car that was unassociated with the crime. So, I mean, this is going to be amazing to see play out, but this is going to, like, emerge some serious consumer privacy rights,

Kyle Mountsier: 10:53

Yep, yeah. I mean, this is the, this is similar to, like, anything that you know, that police are trying to get access to from a camera perspective. You know, any footage? Actually, our producer right now is typing some notes to me that ring cameras stopped providing footage to police due to privacy concerns as well. So I think that this, this will be reverted quickly, but it's just, it's again, like the Pandora's box of having basically a device on wheels. Now, with these, with these new technologies in in all of these cars, like there has to be regulation around all of the technology. You know what? What data is getting shared with insurance companies? We've had conversations about that now, video footage, it's just going to be something that you're going to see. Regulators kind of have to get their hands around on who has access to what data and what privacy concerns are still lingering out there.

Steve Greenfield: 11:54

Yeah. I mean, interestingly enough, you know, I hadn't thought of this ahead of time, but your stories two and three today are intertwined, right? I mean, there is more data being produced out there, which is a good thing. To your point. You know, digital retailing is a real thing now, but, you know, as you know, as Peter Parker's Uncle Ben told him, you know, with great power comes great responsibility. We've got, you know, bigger data perimeter that can be breached by hackers. And, you know, I think it's a new world that we're entering. So for those that like big government or small government, we're going to need someone to oversee these regulations to make sure that as these devices, whether they're phones, cars or, you know, DMS, is that dealerships produce more data that we're protecting the consumer ultimately from, like data breaches. Yep, exactly.

Kyle Mountsier: 12:41

Well, hey, it's a whole new world. And with great power becomes great comes great responsibility. You have a great responsibility to not just care for employees, not just care for consumers, but think about all of these ancillary things that impact your business every single day. Pay attention. Heads up. Have fun. I

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