Russ Darrow Takes the Stage - American International Automobile

The Threat of Card Check 5 | What to Expect from China 12 | New Green Tech 18
Volume 3 Number 1
spring 2009
Presor ted Standard
U.S. P ostage
PAID
Merrifield, VA
Permit No. 1502
AutoDealer
The Magazine of the
Russ Darrow
Takes the Stage
AIADA’s 2009 chairman has the experience,
energy, and enthusiasm to take on Washington
AIADA
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AutoDealer
contents
V ol u m e 3 N u mb e r 1
s pring 2 0 0 9
The Magazine of the
President
Cody Lusk
Vice President of public
and industry relations
Lori McMahon
Production Editor
Libby Krum
Contributing Writers/photographers
Melanie Batenchuk, Marty Bernstein,
Les Jackson, Jim Koscs, Rachel Robinson
Coming to America. Maybe. PAGE 12
features
Focused on the Future: Industry Leaders Gather at
AIADA’s 39th Annual Meeting PAGE 15
For more information about AIADA,
topics addressed in this issue, or for
additional copies of AutoDealer, please contact
AIADA Publications at [email protected]
or 1-800-GO-AIADA.
Board of directors
Mr. Russ Darrow
The Russ Darrow Group
Chairman
Mr. Rick DeSilva
Liberty Subaru
Chairman Elect
Mr. Jim Smail
Smail Auto Group
Vice Chairman
Mr. Larry Kull
Burns Kull Automotivve
Secretary/Treasurer
Mr. Robert V. Rohrman
Bob Rohrman Toyota
Mr. Allen Courter
Honda Auto Center
of Bellevue
In the News
Card Check Creates Government-Run Workplaces
CO L U M NS
PAGE 5
Dealer Involvement
Dealers on a Mission PAGE 7
Partner Spotlight
Dealers Improve Efficiencies and Lower Expenses
Mr. Ray Mungenast
Lexus of St. Louis
Ms. Jenell Ross
Ross Motor Cars
Mr. Tim Smith
Bob Smith BMW
Mr. Morrie Wagener
Morrie’s Imports
From the Chairman’s Desk PAGE 4
Did You Know? PAGE 22
Mr. Greg Kaminsky
Toyota of El Cajon
Mr. Jeff Morrill
Planet Subaru
Mr. Dave Conant
The CAR Group
D E P ART M ENTS
Mr. Brad Hoffman
Hoffman Auto Group
Mr. Jim Hudson
Jim Hudson Automotive
Group
Immediate Past
Chairman
Mr. George Brochick
Penske Automotive
Group, Inc.
Green Tech PAGE 18
Mr. Ralph Ghioto Jr.
Century Automotive
Mr. Don Herring
Don Herring Mitsubishi
17
12
Design Consultant
Larnish & Associates
PAGE 8
View from the Hill
It’s Not Just the Economy Worrying Dealers
8
20
PAGE 9
Dealer Spotlight PAGE 20
Don Brenengen, Brenengen Auto Inc.
George Sharpe, The Sharpe Collection
Jack Thompson, Thompson Toyota, Thompson
Lexus, and Thompson BMW
Mr. Jack Fitzgerald
Fitzgerald Auto Malls
AutoDealer s p r i n g 2 0 0 9 | 3
from the chairman’s desk
T
his January, at AIADA’s
39th Annual Meeting
and Luncheon in New
Orleans, I stood on a
stage with AIADA President Cody Lusk and 2008 Chairman
Jim Hudson and pledged to serve the
membership of this organization with
vigor and to the full extent of my ability. I fully intend to honor that pledge
through the remainder of 2009, whether it be by writing letters, participating
in interviews, or
traveling to Washington, D.C., to
represent our issues
before Congress.
I believe in dealers. I believe in
their work ethic,
their community
involvement, their
ingenuity, and their
potential for success. I discovered
my passion for sales
on a dealer’s lot,
and was able to grow that dream to
support my family and hundreds of
employees. Dealers today deserve the
same opportunities I have enjoyed. I
will do everything in my power to help
dealers of international makes survive
and thrive in these difficult times; not
by asking for handouts, but by working
for a level playing field and freedom
from unfair taxes and crippling regulation.
I was honored when AIADA’s Board
of Directors selected me to fill the
position of chairman. As an organization, we face real challenges this year.
A new, Democrat-led Congress and
administration will be flexing their
muscles, and working to keep untold
campaign promises. In turn, AIADA
will be working to remind legislators
4 | AutoDealer s p r i n g 2 0 0 9
of the benefits of free trade, and the
dangers of un-checked labor organizations (see page 9). We will continue to
advocate for one national fuel efficiency standard and sensible, fair taxation
policies.
Most importantly, my focus as
chairman will be on the economy. As
I said in New Orleans, a global economic recovery hinges on an American
retail recovery. Over the past months,
the federal government’s focus has
been on rescuing struggling domestic
automakers. What legislators now need
to acknowledge is that ALL automakers
selling vehicles in the United States are
struggling, and their falling sales are
a drag on the economy. A true rescue
package will address this reality with
point-of-sale solutions meant to get
consumers into dealerships, not select
corporate bailouts.
So far this year, we’ve seen the
largest piece of legislation in American history passed through Congress:
the $787 billion American Recovery
and Reinvestment Tax Act of 2009.
Whether it is able to get the American
economy back on track remains to
be seen, but perhaps it is a step in the
right direction. As a nation we won’t
get anywhere by standing still, and as
dealers we won’t succeed by staying
quiet. So be prepared to join me in
making some noise in 2009!
Thank you for putting your trust in
me. I look forward to seeing you all in
Washington, D.C., in May for the 3rd
Annual International Auto Summit.
ru s s da r row
AIADA Chairman
The American International Automobile Dealers Association is the only
national lobbying force in the United
States dedicated exclusively to the
economic and political interests of
America’s international nameplate
automobile dealers. AIADA was
founded in 1970 in order to increase
awareness of the international nameplate automobile industry’s value to
the U.S. economy. The association
serves as an advocate for the industry
before Congress, the White House,
and federal agencies. It focuses its
lobbying efforts on trade and anticompetitive restrictions that limit the
availability of international nameplate
automobiles, full repeal of the Death
Tax and other tax measures, affordable health care, labor issues, energy,
fuel economy policies that constrict
consumer choice, and other industryrelated matters.
AIADA Affinity Partners
in the news
Card Check Creates Government-Run Workplaces
by james Sherk
T
he misnamed Employee
Free Choice Act (EFCA)
does more than effectively eliminate workers’
rights to a secret ballot
vote on joining a union. Section 3 of
EFCA gives government officials the
power to impose contracts on workers
and firms. Government bureaucrats
would set compensation and make
most major business decisions at newly
unionized companies. The bureaucrats
writing these proposals would have no
expertise in the company’s operations
or business model and would be unaccountable if their decisions drove the
company into bankruptcy. Workers
would lose all say over working conditions. EFCA would effectively create
government-run workplaces.
Mutual Consent and
Good Faith Bargaining
Mutual consent and good faith
negotiating form the foundation of
the collective bargaining process: The
parties negotiate in good faith until
they settle on terms. If both sides
cannot reach an agreement, the union
may call a strike and the employer
may implement its last offer or even
lock out workers. Both sides use their
bargaining power to win concessions,
but neither side must accept terms that
they find unacceptable. Section 8(d)
of the National Labor Relations Act
specifies that the law “does not compel
either party to agree to a proposal or
require the making of a concession.”
The end result is a contract that
both sides can live with, even if they
would have preferred different terms.
No contract takes effect unless workers
believe they get a fair deal and management believes the contract will not
bankrupt the firm. If negotiations
break down, the workers can strike
or management can lock them out,
The Employee Free
Choice Act deprives
workers of all choice
regarding employment
issues.
but neither side must work under an
unsatisfactory contract.
EFCA Imposes Contracts
EFCA replaces good faith bargaining
with government imposed contracts.
Under Section 3 of the act (misleadingly titled “Facilitating Initial Collective Bargaining Agreements”), EFCA
provides that—after unions organize
a business—the company has 10 days
to meet with union officials to begin
collective bargaining. After 90 days of
bargaining, either party may request
mediation by the Federal Mediation
and Conciliation Service (FMCS).
Thirty days later, if the parties have
not settled on a contract or agreed to
extend negotiations, the FMCS shall
refer the dispute to an arbitration
board established in accordance with
such regulations as may be prescribed
by the Service. The arbitration panel
shall render a decision settling the
dispute and such decision shall be
binding upon the parties for a period
of two years, unless amended during
such period by written consent of the
parties.1
This government-imposed arbitration radically departs from the
foundation of the collective bargaining
process: the principle of mutual consent. In place of the agreement of both
parties, government arbitrators would
simply impose working conditions
on both employers and employees,
whether such conditions are workable
or not.
Bureaucrats Dictate Workplace
Conditions
In practice, EFCA will effectively
eliminate good faith bargaining for
initial contracts because the system
provides no reason for unions not to
hold out for a government contract.
Unions would have strong incentives
to make extreme demands and hope
the arbitrator splits the difference
between these demands and management’s position.2
Granting such a radical amount of
power to an arbitrator puts control of
workplaces in the hands of unaccountable government bureaucrats. Labor
contracts do not simply set wage and
benefit levels but cover many aspects
of how businesses operate. Under
EFCA government bureaucrats would
dictate: wages and bonuses; employcontinued on page 6
AutoDealer s p r i n g 2 0 0 9 | 5
In the News
continued from page 5
ment levels; retirement and health care
plans; changes in business operations;
promotions procedures; work assignments; subcontracting; and closure,
sale, or merger of a business.3
The government would decide how
many employees a firm hired, how
much it paid them, how it promotes
them, and what retirement and health
benefits they receive.
Additionally, the government
would also be empowered to make
critical decisions regarding business
operations. Any business operation
that significantly affects workers’ jobs
or working conditions would be set
by arbitrators—even the equipment
employees use.4 The government
would determine what tasks a firm
subcontracts out for and what work
gets performed in-house. It would
even decide whether businesses could
merge or whether they could relocate
operations.
Government bureaucrats would
set most major business decisions for
newly organized businesses for two
years. Given the power the government would now wield over the private
sector, EFCA effectively allows the
government to run newly organized
workplaces.
Unaccountable for Mistakes
Government arbitrators do not
have expertise in the business whose
operations they will dictate. Instead,
they will prescribe the terms and
conditions of employment to employees and employers without having any
practical experience in the company,
its operations, or its business strategy.
The EFCA gives arbitrators sole discretion in imposing contracts with no risk
that their rulings will be overturned.
And unlike employees and employers,
these arbitrators will not be affected by
6 | AutoDealer s p r i n g 2 0 09
the consequences of their decisions.
Competition means that if an arbitrator miscalculates and forces a company to adopt uncompetitive business
procedures, that same company cannot
raise its prices to compensate without
the risk of losing customers. A poor
decision could easily lead to bankruptcy and layoffs. Yet arbitrators face no
penalty if a miscalculation costs workers their jobs. Government-imposed
The government would
decide how many
employees a firm hired,
how much it paid them,
how it promotes them,
and what retirement
and health benefits
they receive.
contracts have all the downsides of
bureaucratic central planning without
the benefit of a coherent central plan.
Workers Have No Say
Under current law, workers can vote
down a contract they do not support.
Workers also have the right to honor a
strike or to refrain from striking. All of
these rights give workers some degree
of autonomy and control over the
union and their workplace.
With imposed contracts in place,
however, these rights disappear. EFCA
does not allow workers to terminate
the binding arbitration process. No
matter how long arbitration drags on,
the workers will remain stuck with it.
And an arbitrator’s word will be final,
so a vote to reject the contract is out
of the question. With a governmentimposed contract, workers would lose
all say in the workplace. They could
not even ask their supervisors for a
raise for good performance beyond
what the contract specified. EFCA deprives workers of all choice regarding
employment issues.
Putting the Government
in Charge
EFCA does more than take away
workers rights to vote in privacy. It
also gives control of the workplace to
government bureaucrats. Government
officials would write the collective
bargaining agreements of most newly
organized companies. The government would set not just wages and
benefits but all business operations
that significantly affect workers, such
as promotion procedures, retirement
plans, health benefits, subcontracting,
mergers, work assignments, and even
the machines used to run a plant. Employers would lose the ability to pursue
their business strategies, and workers
would lose all say about their workplace for two years. EFCA effectively
constitutes a government takeover of
America’s workplaces.
James Sherk is the Bradley Fellow in
Labor Policy at The Heritage Foundation. AD
Reprinted with permission from the
Heritage Foundation.
The Employee Free Choice Act, S. 1041, 110th
Cong., 1st Sess., Section 3.
2
Homer Deakins, “Consequences of the Employee Free Choice Act,” speech at the Heritage
Foundation, Washington, D.C., February 23,
2009, at http://www.heritage.org/press/events/
ev022309b.cfm.
3
Patrick Hardin and John Higgens, Jr., eds, The
Developing Labor Law, 4th ed., vol. 1 (Arlington, Va.: BNA Books, 2001), Chap.16.
4
I bid., p. 225. Employers may not change business operations if that decision significantly
affects the jobs of workers at the company
without modifications to a collective bargaining agreement. Courts have determined that
changing the type of machinery businesses use
is such a change in business operations
1
Dealer Involvement
Dealers on a Mission
I
Start Growing a Relationship with Congress at AIADA’s 3rd Annual International Auto Summit
n just one month, AIADA
will be hosting its 3rd Annual
International Auto Summit in
Washington, D.C., Navigating a New Washington. This
grassroots-focused event will be held
May 13 and 14. Please see the back
cover of this magazine for more information and how to register.
AIADA has an action-packed
couple of days planned for dealers
attending this year’s summit. With
an emphasis on grassroots activism,
all dealers are asked to participate in
Hill meetings with their members of
Congress during the two-day event.
AIADA’s Legislative Action Network
(L.A.N.) will prepare dealers to go to
battle on behalf of the auto industry
during a legislative briefing.
Dedicated industry advocates will
receive special recognition this year.
At a dinner on Wednesday night
the L.A.N. will present the first ever
Dealers Making an Impact Grassroots
Advocacy Award to a dealer who has
exhibited the highest level of dedication in communicating the mission of
AIADA and the auto industry to his or
her members of Congress.
NEW! AIADA understands
it can be intimidating for a firsttime summit attendee to walk
alone into a Member’s office
on Capitol Hill. That’s why we
created our Hill Meeting Mentor
Program. Email us at grassroots@
aiada.org (subject line “Mentor
Program”). We’ll pair you with
an experienced auto dealer from
your district or state.
AIADA’s legislative briefing
will emphasize the importance
of grassroots advocacy.
The next afternoon, following legislative speakers
and a panel of industry executives, the focus will shift
to Capitol Hill and meetings
between dealers and their
members of Congress.
AIADA encourages you,
the dealer advocate, to stress
AIADA’s stances on crucial
issues such as card check legislation,
arbitration, taxes, the economy and
dealer financing, scrappage, trade,
energy, and the environment. To learn
more about these issues, check out the
Policy Issues page at www.aiada.org.
To sign up for a meeting with your
representative, simply click the “check
box” on the online registration form at
www.aiada.org/events and AIADA will
be in touch!
First-time visits to a Congressman’s
office can be intimidating. But AIADA
members won’t be marching up those
Capitol steps alone. If you are a firsttime Summit or Hill meeting attendee,
the Grassroots Team will work to pair
you with an experienced dealer. That
dealer will guide you through your
meeting, and provide you with tips on
how to correspond with your member
on your own through e-mail, phone,
and the Dealer Visit Program. If you
would like to be paired with an experienced dealer from your district or
state, OR if you would like to volunteer
to be a mentor, please e-mail AIADA at
[email protected] with the subject
line “Mentor Program.” AD
AutoDealer s p r i n g 2 0 0 9 | 7
s pooltvl ei g
D e paalret rn eI rn v
mhetn t
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Dealers Improve Efficiences and Lower Expenses
Using ARMS® Application from Enterprise Rent-A-Car
N
o matter what management system a dealership currently uses, it
can easily be enhanced
by the Automated
Rental Management System (ARMS®)
application from Enterprise Rent-ACar. Designed to complement a dealership’s own system, the ARMS® application, available at no charge, helps lower
rental car costs for service loaners, simplifies invoicing, and improves service
to customers.
Learning to use the ARMS® application is
easy, with personal training at the dealership and ongoing follow-up by Enterprise.
For Lynn Davidson, Service
Manager for Continental Nissan,
the ARMS® application has made her
job significantly easier. “Instead of
spending my time matching purchase
orders and repair orders with rental
invoices, I have more time to manage
the service department. It adds up to
saving me the equivalent of a couple
days each month and that makes a
big difference to my bottom line,”
said Davidson, who has been using
the ARMS® application for about five
months.
8 | AutoDealer s p r i n g 2 0 0 9
As part of Continental Motors
Group, the largest dealer group in
Illinois, Davidson estimates that approximately 70 percent of Continental
Nissan’s customers have a service
contract that includes a rental car. “In
addition to helping me better manage
costs by sending electronic authorizations directly from the dealership to
Enterprise, including the number of
rental days authorized, the ARMS®
application makes it faster and easier
to provide rental cars for our customers,” said Davidson.
With the ARMS® application,
service advisors are able to create an
electronic purchase order for a rental
car at the same time they are initiating
a repair order for service. Because all
of the renter’s information, along with
the number of days authorized, is sent
to Enterprise electronically, the rental
car is ready when the customer arrives
for the service appointment.
Save Money and Reduce Errors
“Combined with my ADP management system, the ARMS® application
helps me better analyze and manage
the rental process on every level, while
making it easy to significantly reduce
errors and unnecessary delays that can
impact customer satisfaction,” said
Davidson.
Davidson added that even if the
customer shows up without an appointment, it takes only 10 to 15
minutes to have a rental car available
because the request is initiated at the
same time the service advisor begins
writing up the service order.
“We are also able to reduce our
costs because the contract is closed as
soon as the rental car is returned to
our dealership, even if the Enterprise
office is closed,” said Davidson. “And, if
we need to extend the rental, information is sent directly to Enterprise,
eliminating the need for follow-up
phone or fax requests. We can also
view and print invoice information
online within the ARMS® system.”
Easy to Learn Program
According to Davidson, learning to
use the ARMS® application was easier
than she expected. “Enterprise took
the time to have someone come to
the dealership personally to train me,
as well as all our service advisors and
accounts payable people,” commented
Davidson. “And Enterprise continues
to come by periodically to check on
everything.”
One of the features that Davidson
finds most useful is the “notes” section
that enables the service advisors to
easily customize information about
an individual customer’s situation,
which is communicated directly to
Enterprise.
“I have better things to do with
my time than making adjustments
and corrections,” said Davidson, who
added she cannot imagine doing her
job without the ARMS® application.
“But the bottom line is that what
I value most is the personal commitment of each of my local Enterprise
representatives to total customer
satisfaction. Having this kind of partnership with our local Enterprise
office makes a huge difference in our
service department’s ability to maintain the loyalty of our customers,”
she said.
For more information or to
arrange a demonstration of the
ARMS® application, please go to
www.ARMSDealership.com or e-mail
[email protected]. AD
v i e w f r o m t h e h i ll
It’s Not Just the Economy Worrying Dealers
I
Legislation Introduced in the 111th Congress Will Impact YOUR Dealership
t’s been said time and again,
but the November 2008 election truly brought about big
changes. In addition to putting President Barak Obama
in the White House it also ushered
in a much more powerful Democrat
majority in both the House of Representatives and the Senate. With Democrats holding strong positions at both
ends of Pennsylvania Avenue, new
legislation is being introduced in the
111th Congress that will directly affect
international dealers — and not always
for the best. AIADA wants to highlight
two issues that have already gained
steam this year and that all dealers
should be tracking.
The Employee Free
Choice Act
The Employee Free Choice Act
(EFCA or Card Check Legislation)
represents an effort by organized labor to grow union representation and
eliminate a cornerstone of democracy,
the private-ballot process. If EFCA
becomes law it will strip workers of
their right to a secret ballot election
on unionization and replace it with
the card check system as the principle
method of recognizing a union. Using
the card check method, union organizers collect signatures of employees on
authorization cards and present them
as a representation of the true intent of
the workers. Card checks can move so
quick that smaller employers, such as
automobile dealerships, rarely have a
chance to talk to their employees during an organizing campaign, allowing
only one side of the debate to be heard
from the union representative, and
leaving employees vulnerable to harassment, misinformation, and union
pressure.
AIADA opposes the Employee Free
Choice Act which threatens dealers,
manufacturers, and their workers and
encourages all its dealer members to
contact their representatives in the
House and the Senate and urge them
not to support the legislation. The
Visit www.aiada.org/policyissues to learn more
about these issues, receive a copy of the AIADA
position paper, and get more facts and figures to
use in your discussion with your legislators. You
can also take action and send a letter to your
representatives straight from our AIADA
Website homepage, www.aiada.org.
battle will be a big one; the legislation
passed in the House of Representatives
during the 110th Congress and is easily
expected to pass again this year. However, the Senate remains a hurdle for
unions in this debate and we need your
voice to be heard.
Call or write to encourage your
Senator to oppose the legislation AND
not vote for Cloture. Cloture is used
in the Senate to limit the debate time
on a bill and therefore bring about a
vote — a vote of three-fifths (normally
60 votes) of the full Senate is required
to pass the motion. Cloture’s main
purpose is to provide a means to stop
a filibuster — a procedure used by the
minority to keep a motion from being
put to a vote.
Cash for Clunkers/Scrappage
Legislation
During a press conference announcing restructuring plans for the
American auto manufacturing industry on Monday, March 30th, President
Obama made reference to supporting scrappage legislation in order to
continued on page 10
AutoDealer s p r i n g 2 0 0 9 | 9
v i e w f r o m t h e h i ll
Stimulus Package —
Passed!
On February 17, 2009 President Barack Obama
signed into law the American Recovery and Reinvestment Act of 2009 after a heated debate on Capitol
Hill. The House of Representatives passed the $787
billion stimulus package by a partisan vote of 246183. The bill then headed to the Senate, where three
Senate Republicans joined with Democrats to pass
the final package by a vote of 60–38.
During the earlier debate in the Senate, Barbara
Mikulski (D-Md.), offered her bill, the Auto Ownership
Tax Assistance Act, as an amendment to the economic stimulus package. The goal of the amendment
was to attract consumers to dealerships by making
interest payments on sales and excise car taxes and
car loans tax deductible, at a cost of $11 billion.
However, as the cost of the entire stimulus package
grew, members of Congress became anxious and the
Mikulski amendment was scaled back to only allow
for deductions on sales and excise taxes during a new
car purchase, a $1.6 billion commitment.
Cody Lusk, AIADA President, commented, “Including the Mikulski measure is an important start
to drawing customers back to dealers’ car lots. But
that’s just it. It is only a start.” AIADA will continue
to urge Members of Congress to consider the dealer
when creating other legislation that could impact our
industry. One example is scrappage, legislation that
would pay consumers to trade in their old vehicles for
new, more fuel-efficient cars.
The auto provision in the stimulus package applies
to eligible purchases between February 17, 2009 and
December 31, 2009.
Consumer Qualifications:
· Individual taxpayers whose adjusted gross income is
less than $125,000 per year
· Joint-filers whose combined adjusted gross income
is less than $250,000 per year
· Itemizers and non-itemizers who may deduct taxes
“above-the-line” on their federal tax returns
Eligible Vehicles:
· All new model year vehicles currently on dealers’
lots that have no prior purchase history
· New passenger cars and light trucks retailing up
to $49,500 may collect full tax deductions. For all
vehicles above this price, consumers may deduct
sales taxes on the first $49,500
10 | AutoDealer s p r i n g 2 0 0 9
continued from page 9
provide a much needed stimulus
to the auto retail industry. AIADA
strongly supports any point-ofsale solution that builds consumer
confidence and gives Americans a
reason to visit a dealership.
Since the President’s press conference, legislation designed to create a cash for clunkers program has
picked up momentum on Capitol
Hill. First, Senator Diane Feinstein
(D-Calif.) and Congressman Steve
Israel (D-N.Y.) have introduced
the Accelerated Retirement of Inefficient Vehicles Act of 2009. This
legislation sets a new car price
cap at $45,000 and would provide
consumers with a voucher ranging
from $2,500 to $4,500 depending
on age of the car and fuel efficiency.
This legislation allows all dealers,
regardless of the type of cars they
sell or where they were assembled,
to participate in the program —
the specific issue of global assembly
is one AIADA strongly supports.
A second bill, the Consumer
Assistance to Recycle and Save Act
of 2009 (CARS), recently introduced by Congresswoman Betty
Sutton (D-Ohio) has similar goals
but with a different approach. The
CARS Act would set a new car
price cap at $35,000 and would
provide consumers up to $5,000
for trading in their old clunkers
for new, more fuel efficient autos.
However, Sutton’s bill also contains
a requirement that the new cars be
built in the United States and get at
least 30 mpg to qualify for the full
$5,000. Therefore, if an environmentally friendly car is built outside of North America, like many
of the international nameplates, it
is not eligible for the program.
AIADA supports a plan that will
benefit the entire auto industry,
the environment, and all American
dealers and is working with Congress to achieve that goal. AD
Support for AIADA’s Positions
Election statistics from the NLRB suggest that the
bulk of union organizing targets small business. For
the fiscal year ending September 30, 2005, the
NLRB conducted 2649 representation elections.
More than 20 percent of these secret-ballot elections
involved bargaining units of fewer than 10 employees
and a full 70 percent of these elections involved bargaining units of
fewer than 50 employees.
A 2004 Ernst & Young LLP study, Outcomes of
Arbitration: An Empirical Study of Consumer Lending
Cases, found that 79 percent of all arbitration cases
are resolved in the consumer’s favor and 69 percent of
consumers were satisfied with the arbitration process.
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The Brilliance M1 is a luxury sedan said
to compete with the Hyundai Genesis. The
model shown at the 2009 Detroit Auto Show
was powered by a turbocharged 1.8-liter,
four-cylinder engine.
Coming to America.
Maybe.
After Years of High-Profile Claims and Promises,
We’re Still Waiting for Cars from China.
b y j i m k o s c s , AIA D A C o n t r i b u t i n g Ed i t o r
A
re Chinese cars ever coming to the United
States? If you count the odd three-wheeler,
micro-truck, or community electric, then
they’re already here. The wait for real passenger cars from Chinese automakers being sold
in the U.S., however, is likely to continue for at least several
more years.
Consensus among carmakers, dealers, industry analysts,
and the media suggests that, although Chinese cars are still
“on the horizon,” the horizon has moved a bit further into
the future. That appeared to be the case even before the auto
industry followed the economy downward last fall.
Questions about vehicle quality, dealer support, and
consumer acceptance continue to follow any mention of
“Chinese cars.” That is not to say interest has waned. AIADA
Chairman Russ Darrow described “tremendous curiosity” around the Chinese-brand cars on display at this year’s
North American International Auto Show in Detroit.
“The Chinese companies clearly would like to sell here,”
Darrow said. “What surprised me most was that one company [Brilliance] was talking about bringing in ‘premium’
cars. I would think they’d start with entry models.” Darrow
questioned whether American buyers would be willing to
take the risk on “premium” cars from China. He also pondered the willingness of banks to make consumer loans for
such cars.
12 | AutoDealer s p r i n g 2 0 0 9
Michelle Krebs, Senior Editor of Edmunds.com Auto Observer, also believes Chinese carmakers would be wise to follow the model set first by Japanese companies and then applied by the Korean carmakers: start low and build upward.
Krebs has followed the auto industry for 25 years and has
been watchful of Chinese manufacturers. “If they do their
homework, they’ll use Hyundai as a case study,” she said.
“As the Japanese companies moved upward, it made
room for the Korean brands,” she added. Krebs suggested
that as Korean carmakers stretch their horizons with sporty
and luxury models, there might be room for a new wave of
entry-level cars.
Coming in Through Mexico and … Sweden?
According to one scenario, Chinese car companies could
arrive in the U.S. before their cars do — and maybe soon.
“The recession is creating buying opportunities for Chinese
companies,” Krebs said. “I don’t think we’ll see the Chinese
carmakers come here directly at first,” she added, explaining that a likely scenario appeared to be either collaboration
with a Western brand — or perhaps the purchase of one.
In late February, at least two Chinese carmakers were
reportedly entering the bidding process for Ford’s Volvo
unit. And as General Motors began restructuring itself into
a smaller company, Saab began to appear ripe for partnership or acquisition. GM even alerted Saturn dealers that the
The Brilliance FRV
is an entry-level
hatchback with a
1.6 liter engine.
brand could continue by sourcing vehicles elsewhere after
2012.
“Buying a brand like Volvo could give a Chinese carmaker instant credibility and an immediate high-profile
U.S. presence,” Krebs said. She pointed out that credibility
is something the Chinese carmakers sorely need to market
in the U.S., especially in the wake of scandals surrounding
lead-tainted children’s toys and tainted baby formula.
At the same time, Krebs thinks Chinese carmakers would
likely first set up in emerging auto markets, including Latin
America. That is exactly the plan put forth by GS Motors,
the auto-making division of Mexico’s Grupo Salinas conglomerate.
Kathy Ligocki, CEO of GS Motors, recently announced
that the company would produce cars from First Auto
Works (FAW) at a new factory in Mexico in 2010. FAW is
one of China’s largest carmakers and has partnerships with
Volkswagen, Audi, Toyota, and Mazda to build their vehicles
in China. GS Motors began importing Chinese-built FAW
models into Mexico last year.
Ligocki told Automotive News in January that FAW cars
built in Mexico could be sold in the U.S. within five years.
Asked by AutoDealer to clarify that statement, Ligocki said,
“We are currently focused on launching our retail network
in the Mexican marketplace. The next priority includes
some key markets in Latin America. Of course, ultimately,
the U.S. and Canadian markets are interesting but we have
nothing formal to announce right now.”
$30,000-Plus Chinese Luxury Sedan
Chinese carmakers again managed to get at least some
media coverage at this year’s Detroit Auto Show. As AIADA
Chairman Darrow said, one company, Brilliance, was touting “premium” cars. The company displayed four models,
the M1 luxury sedan, M2 sport sedan, M3 sport coupe, and
FRV small hatchback. (The “M” badge could likely not be
used, since BMW uses it for its line of high-performance
models.)
The parent company, Shenyang Brilliance Jinbei Automobile Company, Ltd., has a partnership with BMW and builds
its 3- and 5-Series models in China. It also builds vans in
partnership with Toyota. Brilliance is right now represented
in the U.S. by Brilliance Autokam, headquartered in Scottsdale, Ariz. The company is helping Brilliance with vehicle
testing and market research and could become a distributor,
according to its media spokesman, Jack Gerken.
Gerken worked with the agency that represented Hyundai when it launched in the U.S. in the 1980s. He underscored Brilliance’s intentions to follow a different product
strategy than Hyundai did. “Brilliance is definitely not going
to follow the entry-level car route,” Gerken told AutoDealer.
continued on page 14
AutoDealer s p r i n g 2 0 0 9 | 13
The BYD F0 is a
mini-compact city car.
Brilliance AutoHatchback
continued from page 13
He explained that the company would bring in
“improved” versions of the cars shown at Detroit
this year. But Gerken was definitive about the segments targeted: “The M1 would be a $30,000-plus car,
to compete with the Hyundai Genesis,” he said. “The M2 is a
sport sedan built on the same platform.”
Brilliance has not set a timeline for importing cars to
the U.S. “They definitely plan to come here. But they have
said they’ll bring the cars in when the product is right. They
understand that several others have said they would import
cars from China and then failed,” Gerken said.
An American Investor Steps Up
Investor Warren Buffet had drummed up attention last
fall when his MidAmerican Energy purchased a 10-percent
stake in carmaker BYD (“Build Your Dreams”) for $232 million. Krebs believes BYD bears watching. “BYD is altogether
new to cars, but they have vast experience with the batteries
needed for hybrids and electric cars,” she said.
BYD started 14 years ago as a battery maker and today
claims to have 30 percent of the market for cell phone
batteries. Six years ago, BYD bought Chinese automaker
Qinchan. Then in 2008, the company caused a stir at the
Detroit Auto Show when it displayed a prototype of an
extended-range electric vehicle (EREV).
The company says a midsize sedan EREV will go on
sale in Europe in 2010, and then later in North America. A
smaller car is also planned. An EREV is powered by an electric motor, using a small gasoline engine only to recharge
the onboard batteries. The batteries can also be recharged by
plugging the vehicle into an electrical outlet. That is different from a hybrid vehicle, or even a “plug-in hybrid,” both
of which use the combined power of the electric and gas
engines to drive the vehicle.
14 | AutoDealer s p r i n g 2 0 0 9
The Quality Issue
Where are the Chinese carmakers on quality? “The Chinese carmakers have never had to compete with the best in
the world,” Krebs said. She added, however, that she believes
the Chinese companies are capable of making major jumps
in quality, perhaps even more quickly than the Japanese and
Korean carmakers have done in the past.
The Chinese companies enjoy a distinct advantage in
that regard: through their extensive partnerships with Japanese and Western automakers (as required by the Chinese
government to sell cars in China) they are rapidly gaining
experience and expertise from the best in the business.
AutoDealer checked in with a quality expert, David
Champion, senior director of auto testing for Consumer
Reports. He has studied the Chinese cars every year they’ve
been displayed at the Detroit Auto Show.
“The first models I saw from Chery were of Yugo quality. They’ve improved, but they’re still not ready for the
U.S. market,” he said. “The BYD cars look better, and the
Brilliance models look almost ready for the U.S. They appear well made and with good interiors. On paper, at least,
they also appear to have good structural integrity.” That
last comment was to address a video that had circulated on
YouTube in 2007, which showed the poor performance of a
Brilliance sedan in a German crash test.
Champion said he thought Chinese carmakers could be
ready to sell in the U.S. relatively soon. He pointed to the
example of Hyundai’s rise in quality and consumer acceptance. “Hyundai today matches the best of the Japanese,”
Champion said.
Champion was more concerned that the Chinese companies might be underestimating the challenge of building the
necessary infrastructure to sell and service vehicles in this
market. “Buying an existing dealer network might be a good
strategy,” he suggested. AD
Focused
Future
on the
industry leaders gather at
aiada’s 39 annual meeting
in new orleans
T
o some, New Orleans is known as the Big Easy,
but for dealers who assembled there in January
for the National Automobile Dealer Association’s
annual conference, business has been anything but. Credit
is tight, sales are down, and the country is in the midst
of a confirmed recession. Even so, spirits were high on
Monday, January 26 when dealers, industry leaders, and
media gathered at the New Orleans convention center for
AIADA’s 39 Annual Meeting and Luncheon.
2008 AIADA Chairman Jim Hudson
In their speeches, Jim Hudson and Cody Lusk praised
Russ Darrow for his political savvy.
2009 AIADA Chairman Russ Darrow
AutoDealer s p r i n g 2 0 0 9 | 15
Jim Lentz, president of Toyota Motor
Sales USA, and AIADA Board Member
Fritz Hitchcock at Friday night’s cocktail party.
Cody Lusk; Jeff Morrell, vice president, Enterprise-Rent-a-Car; and
Kathy and Brad Hoffman, AIADA board member.
As AIADA President Cody Lusk
put it in his welcoming remarks, “The
events of the past year have proven the
need for a unified industry. As an association, AIADA is moving forward
and focusing on the future.” Part of
that focus meant welcoming Wisconsin
dealer Russ Darrow as AIADA’s new
chairman, replacing South Carolinian
Jim Hudson. Hudson spoke animatedly
of AIADA’s successes in 2008, including the blocking of a damaging piece
of anti-arbitration legislation, and
introduced Darrow to the crowd as a
politically savvy businessman “wellequipped to lead this great organization.”
Darrow, who ran for the Senate
in 2004, called on dealers to promote
AIADA’s small business agenda within
their own communities, and to do their
part to strengthen the auto retail community during tough times. “It is not
just our employees and their families
who count on this business,” he said.
“States, counties, and cities large and
Cody Lusk, former AIADA Chairman Lee Maas, and
AIADA Board Members Tim Smith and Jim Smail.
16 | AutoDealer s p r i n g 2 0 0 9
small rely on our tax revenue to do
everything from paving their roads to
paying their teachers.”
Unsurprisingly, the economy was
the hottest topic among dealers in New
Orleans, and AIADA’s meeting was no
exception. With 2008 sales at a 26-year
low, Darrow proposed a two-fold approach to revitalizing the auto industry
and the nation’s economy. He explained that boosting consumer confidence and stabilizing credit are the keys
to engineering a true economic recovery, and automakers and the legislators
must work together to make it happen.
So far, the outlook is good. Carmakers, like Hyundai, are doing their part
by offering assurance-type incentives
meant to put the wary consumer at
ease. And President Obama, along with
the new 111 Congress, has passed a
$787 billion dollar stimulus bill intended, in part, to normalize credit.
Apart from economic concerns,
Lusk and Darrow assured members
that AIADA would continue to focus
Jack Thompson, accepting his
David F. Mungenast Lifetime
Achievement Award.
on its core agenda of free trade, fair
taxes, and business-friendly legislation. One of the battles AIADA expects
to encounter in the first half of 2009
will be over card-check — a piece of
legislation that would grow the ranks
of unions by doing away with secret
ballots. Workers would be forced to
declare their union preference publicly,
opening themselves up to coercion and
intimidation. “The tradition of secret
ballots is essential to true choice,” said
Darrow. “We’re going to fight this bill.”
As always, AIADA will put a great
deal of emphasis on preserving the
family business. That means fighting the Death Tax and giving dealers
enough freedom from regulation to
maintain profitability. “Keeping family
businesses in the family is more than
a motto to me; it’s a reality I am working toward every day,” said Darrow,
who employs several of his children
and their spouses within his Darrow
Automotive Group. “2009 is shaping up
to be one of the most challenging years
LuAnn and Gary Williams of the Wisconsin Auto and Truck Dealers
Association, along with Russ and Sue Darrow.
Colliver: Change Is the Key to Success
b y m a rt y b e r n s t e i n,
AIA D A C o n t r i b u t i n g Ed i t o r
AIADA member Jon Lancaster; Carloz Hoz
De Villa, president/CEO, Condor Automotive Group; and Scott Young, vice president, Key AutoFinance.
AIADA has ever seen,” finished Darrow. “And you can count on me to lead
us with force and purpose.”
In an upbeat close to the meeting, Pennsylvania’s Jack Thompson
was named the recipient of the David
F. Mungenast Lifetime Achievement
Award. The award is named for the
former AIADA chairman whose zest
for motorcycles, business, and family
have made an indelible mark on the
organization. Cody Lusk described
Thompson, who was nominated by his
daughter, as a “40-year veteran of the
industry, remarkable not just for his
unwavering commitment to protecting
the livelihoods of international auto
dealers but also for his strength as a
leader and reputation for generosity.”
Thompson was one of the first Toyota
dealers in the United States, opening
for business in 1969. In 1989, he once
again blazed a trail as one of the country’s first Lexus dealers. AD
AIADA Board Member Jack Fitzgerald;
Dave Zuchowski, Hyundai’s vice president
of U.S. sales; and Jim Hudson.
Just days before American Honda, Inc.
announced that Dick Colliver, 69, will step
aside as executive vice president of sales
to become senior adviser to the company,
the 47-year industry veteran gave the
keynote address at AIADA’s 39th annual
luncheon and meeting. The theme of his
remarks was, appropriately, the benefits
of embracing change. To the assembled
dealers, he outlined a new course of action to
survive in these challenging times, a task he
acknowledged would not be easy. To begin,
he said, requires an understanding of “what
is driving change in your business,” and a
willingness to take action.
It all starts with being well prepared.
With a nod to newly inaugurated President
Barack Obama’s campaign theme, Colliver
argued, “Whether or not you agree with all of
President Barack Obama’s ideas . . . you must
recognize that his entire campaign was built
on the idea of positively embracing change.”
In business, dealers should do the same, and
accept what Colliver called the “power of
change,” which has impacted his life in many
positive ways.
Among these significant changes were, for
Colliver, new companies, new positions of
responsibility, and supervision of unfamiliar
business areas, including information systems
development and the launch of a new luxury
division for Mazda. While the Mazda division
was never launched, his experience working
on it led to him joining Honda as vice
president of sales.
Colliver credited Honda’s growth, in large
part, to following a guiding principle of
controlling actions taken—as there is no
control over difficult conditions. This concept
clearly resonates with dealers operating under
difficult conditions today. “The trouble is,” he
said, “that for many dealers the limit of their
vision is the end of the used car lot. They
don’t look up to see what’s going to happen in
the market until their business is threatened.
Nor can you wait for the manufacturer to
recognize a problem and come up with a
solution!”
Colliver then outlined basic guidelines of
reaching business goals in difficult economic
times, among them:
•K
now your customer, the competition, and
your manufacturer.
• Know yourself and have a vision of what
you want to become — the largest volume
dealer, the best CSI dealer, a large multifranchise dealer, or the best for one brand.
• Understanding your own business and core
values will help you better anticipate and
manage change.
• Always focus on the customer.
Dick Colliver,
Executive Vice
President,
American Honda
Motor Co., Inc.
Remarking on the importance of trust
between dealers and their manufacturers,
Honda’s top executive in the U.S.
commented, “There are things going on in
our industry that are beyond the control of the
traditional relationship. You must be involved
in everything that impacts your business
including active participation in AIADA.”
Colliver has been a member of AIADA since
the 1970’s.
“Uniting under AIADA gives dealers a
powerful voice in Washington that is an
important part of your ability to achieve the
power of change,” he said. “But the best way
to predict the future is to take the necessary
actions to create it. In doing so, you will
create your own destiny that transcends the
current economic climate.”
After this forceful concluding statement,
Colliver received a standing ovation.
Replacing Colliver will be John Mendel,
who has been executive vice president of
auto operations for American Honda since
2007. AD
AutoDealer s p r i n g 2 0 0 9 | 17
The Future of the Auto Industry Could Lie in Any Number
green tech
of Environmentally Friendly Technologies
The auto industry is actively
pursuing a host of technological approaches that will make tomorrow’s
vehicles part of the solution to climate
change and energy consumption. Some
of these technologies appear in vehicles
available today, while others are coming to the market very soon.
No single approach will solve the
world’s growing environmental crises.
Experts agree that a combination of
many technologies will collectively
work to halt further increases in global
environmental stress.
Working toward that end, nearly all
manufacturers currently or soon will
offer electric or semi-electric vehicles.
The most common type is the hybrid,
in which a small internal combustion
engine works in tandem with an electric motor and battery to propel the
vehicle. Hybrids are most efficient in
city traffic but highway mileage is still
quite impressive.
more power at the same time. Honda
is adding its new Insight model to the
U.S. market this year.
Lexus has offered hybrids for several
years and competitor Infiniti plans
to introduce its first luxury hybrid in
2010. Nissan’s Altima Hybrid continues to do well in the marketplace and
Suzuki has announced a hybrid model
for sale in North America in 2010. The
2010 model year will also see hybrid
models from BMW and MercedesBenz.
Plug-in hybrid vehicles promise
the greatest combination of fuel efficiency, low emissions, and broad
market appeal for the near future. The
technology combines an electric motor with a battery stack that can be
recharged via a household outlet in
addition to an internal combustion
engine driving a generator. In daily
urban usage the battery pack will allow
Hybrids are already mainstream
vehicles and have been offered by a
number of manufacturers for over 10
years. The U.S. hybrid market is currently dominated by the Toyota Prius
and Honda Civic. Toyota’s new 2010
Prius, due on the market in late 2009,
is estimated to yield 50 mpg and offer
b y l e s jac k s o n,
AIA D A C o n t r i b u t i n g Ed i t o r
18 | AutoDealer s p r i n g 2 0 0 9
the driver to go approximately 40 miles
at speeds up to 40 mph without using
the internal combustion engine. Nissan, Toyota, Volkswagen, Honda, and
many other manufacturers are working
to bring plug-in hybrids to the marketplace within the next few years.
All-Electric vehicles were extremely common 100 years ago and
over 80 manufacturers eventually produced them, although none survived
into the 1920s. Lead-acid batteries were
the limiting factor in their overall practicality, a situation now virtually solved
by the lithium-ion battery. Nearly
all manufacturers have development
programs underway to produce allelectric vehicles for urban applications.
Mitsubishi’s Innovative Electric Vehicle
(iMIEV) is being tested in prototype
form in Japan and in the U.S.
Among the advantages of all-electric
vehicles are zero emissions, low maintenance, and low-charging costs. Lithium-ion batteries have design lives in
excess of 10 years and their costs have
LEFT: Honda’s FCX Clarity fuel cell
sedan is already on the road in the hands
of select customers.
BELOW: The Toyota Prius has dominated
the American hybrid market for over
10 years.
h
LEFT: The high-performance
Lexus GS 450h has an EPA
highway rating of 24 mpg.
BELOW: Mitsubishi’s Innovative Electric Vehicle (iMIEV)
demonstrates a range of over
70 miles on a single charge.
fallen by a factor of 19 since the early
1990s. More than $1 billion has been
spent worldwide building manufacturing plants for lithium-ion batteries to
date.
Fuel Cells are currently the most
promising energy source to power electric vehicles. The hydrogen fuel cell is
not a new technology and it has been
used in the space program for decades,
but costs are traditionally very high.
Financial issues aside, manufacturers
have been working on fuel cell development for a number of years. Mercedes, Honda, Toyota, Nissan, and others have very active fuel cell programs
underway.
The advantages of fuel cells include
extended range, zero pollution, and no
CO2 output. In addition, the electrical
power output (usually in excess of 75
KV) could easily be adapted for use as
standby generating capability. One fuel
cell vehicle is capable of powering 4-5
homes.
Natural Gas is a very good fuel
for internal combustion engines, offering the advantages of huge domestic
supply and relatively low emissions.
There are over 9 million natural gas vehicles currently on the road worldwide
and many are in fleet use here in the
U.S. Buses, delivery vehicles, and shuttles widely use natural gas and there
are proposals to convert large numbers
of heavy trucks to the fuel. Honda currently offers a compressed natural gas
version of the popular Civic that is
fueled by a special pump mounted to
residential gas lines.
Diesel vehicles are extremely
popular in Europe and are gaining
recognition here in this country, with
industry experts predicting growth to
15 percent of the new vehicle market in
as few as five years. The driving force
of this growth is clean diesel technology that does away with engine noise,
smoke, and odors.
Diesel reduces carbon dioxide emissions by 10-20 percent over gasoline
and is up to 30 percent more thermally
efficient, which means significant
increases in fuel mileage. The newest generation of clean diesel vehicles
offers all the performance and driver
response of their gasoline-powered
counterparts and driving ranges well in
excess of 600 miles on a single fill.
Another attractive attribute of the
diesel engine is its ability to run on
bio-diesel fuels. Bio-diesel is a fuel
derived from domestic, renewable re-
sources such as fat or vegetable oil that
has undergone a chemical process.
Ethanol is another renewable fuel
for use in traditional internal combustion engines. It is distilled from crops
such as corn but major research is
underway to produce ethanol from
biological waste like corn cobs, wood
chips, switchgrass, municipal solid
waste, and many other forms of cellulose. There are currently more than
6 million E85 (85 percent ethanol, 15
percent gasoline) vehicles on the road
today and over 1,900 E85 fueling stations around the country.
Hydrogen is in many ways an ideal fuel for internal combustion engines.
It burns cleanly and produces ample
power per unit cost. BMW and other
companies are testing vehicles that
exclusively burn hydrogen and development continues on hydrogen storage
and production.
Until automakers set upon the technology that serves them—and their
customers—best, everyone who drives
a vehicle can be part of the solution by
driving the speed limit, keeping unnecessary items out of the vehicle for weight
savings, and monitoring tire pressure. AD
RIGHT: The fleet of BMW 7 Hydrogen-fueled cars at the UN Climate
Conference in Pozna, Poland in
December, 2008.
AutoDealer s p r i n g 2 0 0 9 | 19
dealer spotlight
Dealers Check In
George Sharpe
The Sharpe Collection
Grand Rapids, Mich.
Don Brenengen
Brenengen Auto Inc.
West Salem, Wisc.
Don Brenengen first became involved in AIADA in 2005 after purchasing his KIA dealership. Dealers since 1991, Brenengen and his wife are
committed to giving back to their community. They are active within
the non-profit organization the Village People and have helped found
a local Boys & Girls Club. The Brenengen dealerships hold monthly
Car Seat Safety Check Clinics and employees have given thousands of
dollars to charitable causes throughout the years. Brenegen has been
interested in the car business since he was a child, watching his father
restore damaged vehicles as a second income.
What methods do you use to
attract and retain the best
employees?
Retention of employees starts with
hiring the right people in the first
place. We have made our mistakes in
this area and have learned just how
much the
wrong person can cost
both the
owner and
every person on our
staff. Hiring
just to fill
the position
is not good
enough.
When we feel we have the right
person for the job, we provide them
good income opportunities, continuing education, and demonstrate
a sincere interest in their success.
Additionally, we share the financial
success of our dealerships with our
staff in the form of profit sharing.
What are you doing to stay
profitable during this
economic slow-down?
In anticipation of the slowing
economic climate, we reduced our
new vehicle inventory and increased
our number of used vehicles. We are
20 | AutoDealer s p r i n g 2 0 0 9
focusing on used vehicles that will
maximize our return on investment
yet meet the needs of our customer
base. Then we increased our efforts to
reduce all manufacturer receivables,
customer receivables, and contracts
in transit.
Over your career, what
manufacturers have most
impressed you? Why?
I am most impressed with Honda.
They developed long-range plans and
seem to stick with them even though
they could have greater short-term
profits by deviating from them. I
admire companies that take a longterm approach and aren’t swayed by
short-term rewards. Our government
should take notice and develop a
long-term energy policy that would
provide guidance for companies and
individuals trying to create their
own long-range plan. Our leaders
should also develop tax policies that
reward long-term investments.
What is your personal
dream car?
That would be a black 1966 GTO
hardtop with a 389 and a 4-speed
transmission. My dad had one in
1967 (that he had repaired, of course)
and it was the first vehicle I had ever
driven that had any real power.
George Sharpe started out in the
auto business in 1963 at a Chevrolet
dealership. Today his family-run
Sharpe Collection includes BMW,
Land Rover, Jaguar, and MINI
franchises. Sharpe is active in his
community, serving on hospital
and school boards. He has also
served as vice-chairman for the Automobile Dealers of Michigan and
been involved in numerous capital
campaigns, most recently for the
Lacks Cancer Center.
How does technology improve
your business?
Utilizing technology is an important
part of automobile sales.
Most shoppers use the
Internet to begin their
search. It is crucial that we
have updated inventory
online with competitive offers. We’ve also used search
engine optimization to stay
ahead of the competion
online. However, we still
remind ourselves that this
business is about the people. Nothing
can compare to great customer service
face to face.
How do you stay profitable during this economic slow-down?
It’s important to have a proper expense
structure in place. When the economy
is strong it’s crucial to watch expenses
in order to protect your business during a slow down.
How do the ups and downs
of gas prices impact your
business?
Regardless of gas prices, I think our
clients are always concerned with fuel
efficiency as a long-term issue. Fortunately, we recently acquired the MINI
dealer spotlight
franchise which includes models that
receive up to 37 mpg. However some
clients prefer a large vehicle to suit
their lifestyle. BMW has an X5 diesel
on the market that burns significantly
less fuel and produces significantly less
greenhouse gas emissions.
What manufacturers have
impressed you?
Each day I’m impressed working with
BMW, MINI, Land Rover, and Jaguar.
Each manufacturer is quite different,
but all have a strong desire for the
dealers to prosper. Over the years, I’ve
been especially impressed with BMW.
I admire their discipline. I also appreciate how proactive they are with the
dealers in assisting with our success.
When did you first get involved
with the AIADA?
I became active in the group through
BMW years ago. I became involved because I believe it’s important to protect
our interests from the federal government.
How does legislation impact
your business?
Legislation from the state and federal
level has an impact on our viability
and profitability, so it’s important to
stay updated on pending legislation
and voice our opinion as dealers.
What is your most memorable
sale?
The sale of our Buick store back to GM
in 2005.
Jack Thompson
Thompson Toyota, Thompson Lexus, and
Thompson BMW
Doylestown, Penn.
Jack Thompson was one of the first Toyota dealers in the United States,
opening for business in 1969. In 1989, he once again blazed a trail as
one of the country’s first Lexus dealers. He credits his success, and
correspondingly high customer satisfaction and retention scores, to the
philosophy that he is not in the car business, but the people business.
In 1997, he won the Time Magazine Quality Dealer of the Year Award
and in 1998 the Sports Illustrated Dealer of Distinction. In January, 2009
he was honored with AIADA’s David F. Mungenast Lifetime Achievement Award.
What first got you into the auto
retail business?
My love of cars led me to the automobile business. In the late 60’s I
tried to obtain a domestic franchise,
however they were not interested in
talking with me as I had very little
funding and had not been in the
business previously. In 1969 Toyota
and I both took a chance with each
other. Needless to say, it has been a
wonderful long-standing partnership.
What methods do you use to
attract and retain the best
employees?
We put a lot of emphasis on creating
a good environment for our employees as they are our most important
asset. We offer competitive benefits
and have an open door policy for
employees to come and talk to their
managers or our HR department.
Presently we have 425 employees, so
outreach and communication with
our staff is imperative.
Over your career, what manufacturers have most impressed
you? Why?
Without a doubt, Toyota, Lexus, and
BMW, because they are in the people
business as well as the automotive
business.
When did you first get involved
with AIADA and why?
Approximately 30 years ago, Toyota
asked me to get involved with AIADA. Toyota dealers were not well represented at that time and we needed
more participation with legislation in
Washington.
What is your personal
dream car?
I have always loved the 1947 MG TC
as it was both my first street car and
the car that I raced on the track on
weekends. My dream car…hard to
say, but I’m always open to the next
opportunity to add to my collection
of over 100 antique and vintage race
cars.
continued on page 20
AutoDealer s p r i n g 2 0 0 9 | 21
Did You Know?
>>
Share these facts in your community and beyond, and help AIADA spread the message:
International dealers are making a difference.
The average U.S. dealership has over
50 employees.
It is estimated that each
In 1999
direct auto job sup-
ports at least 5 indirect
Nissan sales received a
jobs in a community,
boost when the Xterra,
resulting in more than
Frontier, and Pathfind-
More than 50 percent
50 million jobs worldwide.
er were named the offi-
of international makes sold
in the United States are
built in the United States.
cial vehicles of the L.A.
International automakers are
expected to continue investing in U.S. operations. They
will add more than 38,600
County lifeguards and
International
became a hit on the TV
automakers
pumped
some
show “Baywatch.”
$40 BILLION
into 70 American
facilities in the
last 30 years.
workers by 2016.
In 2007, the average
dealership payroll
was over $2.3 million.
U.S. employment
of workers in
international automotive assemblers
has increased
by 52 percent
since 1995.
Total international dealership employment is over 450,000.
22 | AutoDealer s p r i n g 2 0 0 9
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