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Next 2 months critical to industry future, NADA chairman says

November 15, 2010

With 2009 expected to be one of the toughest years yet for auto retailing, the incoming chairman of the National Automobile Dealers Association issued a call-to-action Jan. 26, urging dealers to make their voices heard in the debate over how to return the industry to economic viability and how new emission standards should be implemented.

"The nation’s new-car dealers have already made strides in communicating the importance of the franchise network, the need for federal bridge loans and the necessity of stable credit markets. But the work must continue," said 2009 NADA Chairman John McEleney, an Iowa dealer.

"The next two months," he said, "are critical to the future of our industry as we know it—the future of GM and Chrysler, the availability of credit and the return of stability to our economy.

"In a 17-million-sales year, it may be enough for us to share that we sponsor Little League teams or that we helped to fund the new wing at the local hospital. In a 12-million-sales year, we’ve got to tell how we contribute to our community’s bottom line."

Examples McEleney cited:

• "Tell how many of our employees’ kids we helped send to college."
• "Tell how many people were able to get healthcare through us."
• "Tell how many people picked up lifelong skills—technical skills, people skills and management skills in the time they’ve worked for us."

"The unprecedented nature of the times we find ourselves living in has been both a blessing and a curse," he said. "It’s drawn the kind of attention to our industry that we haven’t encountered in years."

McEleney said some pundits characterized dealers as a drain on the books of automakers and suggested it was time to do away with the franchise system.

"We had to inform people about the model of our business," he said. "It’s our money we invest in buildings and staff and training, not the manufacturers. It’s our investments that are on the line to get their products distributed to buyers."

With much attention being paid to the industry, it is incumbent upon dealers to inform the public about auto retailing’s impact on local, state and national economies. Sales taxes collected at auto dealerships nationwide total billions of dollars each year. And auto sales make up nearly 20 percent of all retail spending in the United States.

President Obama on Jan. 26 directed the Environmental Protection Agency to review whether to authorize state efforts to regulate vehicle emissions. The NADA welcomes that review, McEleney said, but is urging the administration to carefully examine how those rules would be implemented. He said that kind of review would indicate that the California Air Resources Board’s rule is in direct competition with the federal CAFE program.

"We hope," McEleney said, "the president and the EPA administrator will realize that a single national fuel-economy standard is smarter than a patchwork of state regulations that will only further endanger our industry."

With the auto industry undergoing drastic changes, 2009 could be one of the most challenging years ever. But the auto industry is cyclical, and dealers will continue to succeed if they focus on things they can control, McEleney said.

"Our job is to protect and strengthen our dealerships so that as the cycle turns upward, we are in a position to thrive," he said.