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December 30, 2009 Dear Colorado Dealer, As 2009 winds down, we take a look back and a look ahead… |
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New cars dealers could breathe a sigh of relief recently, due to the concentrated efforts of the National Automobile Dealers Association (NADA), the Committee to Restore Dealer Rights, the Automotive Trade Association Executives (ATAE), who together formed a coalition of dealer-advocate groups. Both the US Senate and the US House of Representatives passed legislation, later signed into law by President Obama, which will probably restore some dealership agreements that had been terminated during the GM and Chrysler bankruptcy process. The legislation will create an arbitration process and provide previously terminated GM and Chrysler dealers to have, through the arbitration process, a chance at reinstatement or compensation for their loss.
The value of relationships between dealers and their Members of Congress proved, once again, critically important during a time of tremendous change in Washington, DC. Many new car dealers remain in close contact with their Members of Congress and US Senators. Those longstanding relationships empower dealers to be able to educate Members of Congress on issues of importance to the industry. Yet dealers should remember, as all constituents should, every time there is decision made in the US House, all 435 Members of Congress either vote for you or against you. Additionally, every time there is a decision made in the US Senate, all 100 Senators either vote for you or against you. The moral to that is, you want all of them to vote for you!
That is where NADA comes in. The legislative successes clearly demonstrate the value of your national association within the political process. As CADA does at the state level, NADA is able to communicate nationally with all 435 Members of Congress and all 100 US Senators on the critical, often complicated, issues that either positively or adversely affect your business. In essence, NADA consolidates the strength and power of 18,300 new car dealers nationally and leverages that strength to benefit you, your dealership and the others across the country.
NADA’s political efforts on behalf of dealers are enhanced through the efforts of the Dealer Election Action Committee (DEAC). DEAC helps ensure that those legislators who are understanding and supportive of dealer-stated positions are provided assistance to return to Congress after the next election. DEAC is backed by thousands of dealers across the country, unfortunately, not yet by all dealers.
That means that a segment of the overall dealer-body essentially carries the financial load and meets the needs of all dealers. In fact, DEAC is recognized for ranking as one of the Top-Five association-based political action committees (PACs) in the country, providing dealers significant needed clout on Capitol Hill and through the national media.
We seek to ensure that all dealers are aware of the important role DEAC plays on your behalf in the nation’s political process. It is recognized that not every dealer is as politically active as are others. Those who have a greater investment in their operations have more at stake. Some dealers understand and gravitate to the political process. Others shy away from it. Where do you fit on that spectrum?
My granddad had a pretty effective line that he passed on to me while I was but a mere child. He was not a political activist, yet he involved himself in the process. As an entrepreneur he recognized, “If you don’t get involved in politics, politics will run your business.” So, he watched elections and counted votes. He contributed to campaigns, though not in large denominations. He was effective because of his activism. I think he provided a good example and if he were alive today, he would probably be more active than he ever needed to be in his day.
It is difficult to quantify the value of a specific legislative victory such as the restoration of dealer rights on behalf of wrongly terminated dealerships. Yet I suspect the win by NADA was of greater value to dealers across the country in one year, than the dealer body would pay to NADA and donate to DEAC collectively in an entire generation.
If the prospective restoration of dealer rights who were wrongfully terminated during GM and Chrysler bankruptcies is not of direct interest to you, the other recent NADA victory on Capitol Hill should be. That victory, although not yet final, is significant. It has to do with the creation of a new federal bureaucratic oversight agency called the Consumer Financial Protection Agency (CFPA).
The recent Congressional debate over consumer protections and financial industry oversight legislation would seem inconceivable to almost anyone outside the direct daily operation of a lending or investment operation. Certainly the legislation deals with issues that average Americans are not generally involved with on a daily basis.
Yet, otherwise well-meaning Members of the US House of Representatives debated and passed legislation, with the intent of “protecting” consumer transactions and credit cards. The legislation as originally proposed would have regulated new car finance arrangements negotiated between you as a new car dealer and your customers, and put every aspect of the financed deal under the purview of the new agency. This would have been a bad arrangement for all new car dealers, as this agency would have new streamlined powers to regulate any practice it deemed unfair. If you think your auto retailing operation is heavily regulated now, you haven’t seen anything compared to what was headed your way, had it not been for the pro-active efforts on the part of NADA.
A variation of the old adage
applies…What you don’t know, can hurt you! As the premier
Washington, DC, political newspaper, Politico, recently elaborated, the
National Automobile Dealers Association (NADA) played a critical role in
gaining an exception from the oversight of the proposed new CFPA. Said
Politico, “Represented by the National Automobile Dealers Association, the
dealers are a powerful local force, and they flexed serious muscle to win an
exemption in the House version of the CFPA bill, over the opposition of the
committee’s powerful chairman, Rep. Barney Frank (D-Mass).” Politico
continued, “Across the field from the auto dealers in this brawl are the
consumer advocates — a coalition that, after years of unheeded warnings, has
gained new clout in the post-financial crisis world.”
NADA represents you in meetings that you are not often invited into, wouldn’t have time to attend if you knew about them and possibly would not have the relationships with national policy-makers to ensure a win even if you were there. It is difficult, even nearly impossible, to place a value on these significant victories. Suffice it to say, NADA is delivering value to dealers through their advocacy efforts that are often overlooked, undervalued and, too often, unappreciated. It reinforces the importance of involvement in NADA beyond the cost of your membership dues.
For additional information on how you can make a difference in our fight to preserve our businesses from excessive government intrusion, contact either of our Colorado-based NADA directors, Jeff Carlson or Don Hicks, or call Don Gerbaz, incoming Colorado DEAC state chairman or me. We will be happy to explain how 30-years of hard fought involvement in the nation’s political processes has returned a high level of dividends for all new car franchised dealers.
Being involved and participating in the process seems the easiest way to ensure that you are in the “I care” column of dealers who recognize that without this type of involvement and effectiveness, our problems in the retail auto industry would be substantially greater than we currently face.
Sincerely,
Tim Jackson,
President
303.282.1448 |
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