2000s: Decade of uncertainty

2000s: Decade of uncertainty


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2000-2009 Timeline of Events (click to enlarge)

From 9/11 to 2010, the decade was full of change and challenges. Yet the 2000s began calmly enough, with no Y2K meltdown of the world’s computers. Soon dealers faced success on many fronts. OSHA proposed sweeping new ergonomics standards, which were soon overturned by Congress. An NADA-backed bill lowering the estate tax (for one year) would soon be signed into law by President George W. Bush.

 

Ford and GM wanted to sell directly to consumers, but those plans—which included the OEMs selling cars online—were quashed by state legislation. NADA then created a national portal to link dealer websites. While Ford’s Blue Oval and other dealer performance programs became a concern, NADA opposed automaker efforts to impose unfair burdens on dealers.

 

But Oldsmobile was shuttered in late 2000, following sagging sales, so NADA pushed GM for just compensation, as well as low- or no-cost loans and floorplanning assistance from GMAC. Then longtime NADA chief Frank E. McCarthy died a few months later. After a nationwide search, Phillip D. Brady became NADA president, and September 10, 2001, there was a dedication ceremony to name NADA headquarters the Frank E. McCarthy Building.

 

Terrorists strike

NADA was in the midst of its 26th annual Washington Conference the next day when terrorists struck the World Trade Center and the Pentagon. With uncertainty after the 9/11 attacks and airports closed, many dealers and NADA staff hunkered down for days at the Capital Hilton in Washington, D.C.

 

The National Automobile Dealers Charitable Foundation quickly established a survivors’ relief fund to help meet the educational needs of the victims’ dependents. The attacks meant the Super Bowl would be delayed by one week, which caused a scheduling conflict with the NADA Convention in New Orleans. As part of a “Super Bowl swap,” NADA agreed to move up its convention, which required extensive last-minute maneuvering with attendees who already had made their plans, as well as speakers, exhibitors, hotels and the convention center.

 

Despite the shock of the attacks, NADA moved forward, achieving a major victory when voluntary arbitration in franchise agreements became law in 2002. The association created a code of ethics to help dealers run their businesses, partnered with USA Today on a Dealer Innovation Award to recognize technology-savvy dealers, and teamed with NHTSA to promote child safety-seat events at dealerships.

 

Initiatives to support dealers

By 2004, NADA was tackling poorly constructed automaker CSI programs, then promoting initiatives to help the media and consumers better understand the benefits of dealer-assisted financing. NADA became a founding member of AWARE (Americans Well-Informed about Automotive Retailing Economics) and joined with Junior Achievement to teach middle-school students about personal finance.

 

The association wanted to bolster dealers in other ways, so it introduced the NADA Century Award (page 56), honoring dealerships that have been in the transportation business for 100 years or more. To foster dealership job opportunities, NADA developed a tool kit for dealers to promote automotive careers, helped former NCAA student athletes find jobs and promoted AYES—Automotive Youth Education Systems—to recruit service techs. NADA also worked with Energy Star and promoted “green” dealerships to help dealers cut utility and other costs, then started a green checkup campaign for dealerships to show consumers how to reduce their carbon footprint.

 

When Hurricane Katrina and later Rita smashed into the Gulf Coast in 2005, NADA helped dealership employees by distributing more than $4 million through the Emergency Relief Fund. Three years later, the National Automobile Dealers Charitable Foundation presented a $400,000 check to the Lusher Charter School in New Orleans to restore acres of athletic fields damaged by Hurricane Katrina. In 2009, the association held its convention in New Orleans, the first time since the hurricanes, with former presidents George H.W. Bush and Bill Clinton, who together had spearheaded critical relief efforts for the area.

 

The Great Recession

For years, NADA had been pushing for total-loss disclosure on vehicles that had been totaled, stolen or damaged by flood. The 2005 hurricanes were the unfortunate catalyst for trying to move this legislation forward. Along with vehicle identification, there was now a consumer-identification issue after the FTC issued red flags” rules to prevent identity theft.

 

But another storm was brewing, though this one was financial. The Great Recession officially began in late 2007, though many dealers had already been struggling for years. NADA launched a Performance Improvement Program (PIP) and “Lifeline to Profit$” consulting hotline in response. When the health of thousands of GM and Chrysler dealerships was threatened in 2008, NADA organized multiple fly-ins to Washington to influence Congress on auto-industry relief bills and held dealership-survival workshops at the 2009 convention.

 

An NADA Industry Stabilization Task Force was formed to encourage the government to act quickly to stimulate the economy. This included bridge loans for Chrysler and GM, as well as expanded SBA loan guarantees and a Cash for Clunkers” program to bolster new-car sales. NADA leadership testified before Congress and met with regulators and White House staff.

 

While many dealerships were saved, some were not. And it would take many more years for dealers and the country to truly find their financial footing.