Tonkin: 2010 is a time to heal wounds

Amy Wilson
Automotive News | February 8, 2010 - 12:01 am EST


Ed Tonkin takes over as chairman of the National Automobile Dealers Association after a year fraught with problems for dealers and the industry.

More than 1,700 dealerships closed last year, most because of financial problems or rejections by Chrysler Group and General Motors Co.

Tonkin, 55, is vice president and general counsel of the Ron Tonkin Family of Dealerships in Portland, Ore. He spoke with Staff Reporter Amy Wilson.



What are your priorities for 2010 on the manufacturer and dealer side?

Staying close to the manufacturers. As manufacturers clamor to regain market share, I think we'll see some new and unique incentives and promotions -- some of which may create an uneven playing field for dealers.

Examples?

From the past: objective-based stairstep programs. We're going to have to watch for those and try to make sure the marketplace is a fair one for all.

In some cases, we're going to have to try to repair relations with the manufacturers, the obvious ones being Chrysler and General Motors. Everybody went through a rough patch, and there are some bruised feelings. We have a real opportunity to create a genuine partnership with these folks, and that's critical.

Also, we need to tell our value story to our members. For political reasons we were unable to discuss openly the extensive involvement we had. Yet other groups, particularly the CRDR [Committee to Restore Dealer Rights], was crowing loudly and consistently about what they were doing. Yet NADA was no less involved. NADA has a different charge because we represent all dealers. We don't represent a particular subset. We were in a position of representing the go-forward dealers as well as the ones that got disenfranchised.



How difficult a line was that to walk?

It was difficult, but we handled it. In some dealers' eyes, maybe NADA wasn't as involved as they should have been. Well, that's not true. We're going to go out and make sure that people understand what NADA does.

We were instrumental in saving a lot of dealers already from termination before those final numbers came out. They were going to be far greater.



What original numbers were proposed?

Chrysler's was going to be up near a thousand, maybe not that high. And General Motors, the first go-round was something around 1,500.



How do you correct what you describe as a perception problem about NADA's role?

It takes time. I'm not planning on belaboring that in my [convention] address. The more we create ambassadors for NADA, the more that I talk about it, it gets picked up and read.

We have to prove it through our actions. It's bringing successes to the dealers. For example, you explain to dealers how we were able to get out from under the Consumer Financial Protection Agency Act.



Are there hard feelings among NADA's directors because of the controversy?

The hardest steel is forged out of the hottest fires. And that's OK. Auto dealers are passionate people. Maybe it does cause hard feelings at times, but the end result is you might end up getting a better product.

This whole industry has been battered and bruised and beat up from the inside out. We all have to heal. To really get some momentum again, we've got to be on the same page -- dealers and manufacturers.



What is the key to healing those wounds?

A good strong dialogue. And being present. General Motors should be at this convention. This situation with General Motors typifies what I was saying about everybody coming through this last year running the gantlet and being bruised. Manufacturers, they're not happy about having to go through arbitration.

Our reaction: Let cooler heads prevail. What's in the best interest of both organizations? What's going to make the most business sense? That's the kind of thing everybody's got to take a timeout, sit back and think about.



Do you feel openness from GM to move forward?

I was there at that meeting with [CEO] Ed Whitacre and [North American chief] Mark Reuss. I appreciated the fact that [Whitacre] said what was on his mind. And he was a very good listener. [They] indicated that they understood some of the things that we were saying.

And we have started to hear some very positive stuff from General Motors, things about reinstating dealers.



Where do you think NADA stands in terms of the organization's relevance and clout in the industry and in Washington?

Our relevance is as high or as important as it's ever been. It's going to be instrumental that we're more visible this next year to demonstrate that.