Thursday, December 15, 2011

December 2011 SDADA Column


There is a story about an optimist who fell from the top story of a skyscraper and as he passed the fourth story, he was overheard muttering, "So far, so good!"
Car dealers are a pretty optimistic lot. We can go several days without selling anything but each morning starts with the thought that “today we’ll sell ten cars”. That’s why I enjoy the company of fellow dealers. There is always a “silver lining”.
Search “car dealer optimism” on Google and you’ll find dozens of recent stories about dealers’ optimism for the 2011 year end. I’ll suggest that we are always optimistic. It only makes news when others think we should be optimistic.
2012 Convention on Pace to Be Biggest Since 2008
Expect that optimism to carry over this February, too, when we head to Las Vegas for the NADA/ATD 2012 Convention & Expo. If the last few months of 2011 are any indication, we have a lot to look forward to in 2012. The Expo is sold out. Convention attendance is up, which means the 2012 convention is shaping up to be one of the biggest in recent memory.


This convention will mark the first time NADA and its American Truck Dealers (ATD) division will host a combined event for car dealers and heavy- and medium-duty truck dealers. And early interest is off the charts. For the first time since the economic collapse of 2008, we’re on pace to draw more than 20,000 attendees.
As always, we’ll have a host of dynamic speakers, including Chrysler’s Sergio Marchionne; Aron Ralston, the climber who inspired the Oscar-nominated film “127 Hours”; and, our keynote speaker, former President George W. Bush. NADA University is offering more than 50 workshops, with two full workshop sessions beginning Friday, Feb. 3. And J.D. Power and Associates will again co-host Friday night’s Welcome Reception. We’ll also crown a new TIME Dealer of the Year and announce the winners of the ATD Commercial Truck of the Year and ATD/Heavy Duty Trucking Truck Dealer of the Year awards.
It’s going to be quite an event – and not just because it’s Super Bowl weekend! Hotel rooms are filling up quickly. In fact, seven hotels have already sold out. So if you haven’t done so already, make your plans today to attend by visiting www.nadaconventionandexpo.org. There’s no better place to take the pulse of our entire industry. And chances are the outlook will be … optimistic!
New Tools Make it Easier than Ever to Plan Your NADA 2012 Experience
NADA has several new tools to make the most of your experience at the 2012 NADA Convention & Expo. Here are a few:
• Follow convention news and updates on our new blog at http://nadaconvention.blog.com.
• Follow convention activities on Twitter, Facebook and Linked In.
• Create an action plan with myNADAplanner, an online scheduler that allows you to connect with exhibitors, search workshops and speakers and schedule franchise meetings.
• Download the NADA 2012 mobile app for iPhone or Android. Sync your app with myNADAplanner and carry your personalized schedule in the palm of your hand.
NADA Continues to Vigorously Defend Dealer-Assisted Financing Model
The Federal Trade Commission (FTC) conducted its third and final Motor Vehicle Dealer Roundtable on Nov. 17 in Washington, D.C. The FTC is examining what, if any, actions it should initiate to further protect consumers in the area of vehicle financing. The actions it may pursue include rulemaking, enforcement, and consumer and business education. As with the two prior FTC roundtables in Detroit and San Antonio, NADA representatives provided a vigorous defense of the dealer-assisted financing model and provided extensive information to correct and rebut a series of misstatements made about various dealer practices. NADA also underscored that, despite repeated requests for empirical information from the FTC, the consumer group allegations of dealer misconduct were anecdotal and unsupported by current and reliable data demonstrating that they are widespread.

Tuesday, November 15, 2011

November 2011 SDADA Column


Do you think you could sell a full-size pickup that got 50 miles per gallon? How much could you sell a truck like for? Could you get $75,000? $90,000? Would South Dakota farmers and ranchers be lining up to buy that truck?
I believe most dealers just want to be able to sell their customers a vehicle that fits their needs at the best price possible. The Obama administration has estimated the proposed 54.5 mpg by 2025 mandate will add an additional cost of between $3,100 and $3,600 to the price of a new vehicle (that is in today’s dollars). I wonder if that additional cost will be the same on a full-size pickup as it is on a compact car.
It seems like just yesterday we were talking about the new fuel economy standards for Model Years 2012-2016. But the Obama administration, driven to act by California, is particularly motivated to get the next round of standards done three years before they are required to do so.


This latest proposal – 54.5 mpg by 2025 – is raising some eyebrows. Most automakers have, in principle, agreed to the plan. But it’s far from the finish line. And if a growing number of members of Congress have their way, the administration’s efforts could be put on hold.
Last month, NADA applauded the bipartisan efforts of Congress members who sent a letter to the chairmen of the powerful House appropriations committee and the House appropriations subcommittee asking them to give the Environmental Protection Agency a one-year “time out” from their work on fuel economy standards for 2017-2025 and prevent California from implementing its “patchwork” fuel economy regulations. Members of Congress asked for support of an amendment by U.S. Reps. Steve Austria, R-Ohio, and John Carter, R-Texas. That letter and recent oversight hearings featuring several prominent House members, including Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, have ramped up pressure on the administration to justify its cost assessment of its proposed fuel economy rule.
NADA thinks it’s entirely too early to be talking about fuel economy proposals that won’t even be acted on until 2015. We’re backing a more practical approach that will allow us to learn from the current standards and see how consumers in the marketplace react to them. That’s why we support the Austria-Carter amendment, which seeks to ensure the impact of these rules on jobs, consumer choice and vehicle costs are properly evaluated. The amendment would also achieve one of NADA’s top regulatory priorities by temporarily returning rulemaking authority to the National Highway Traffic Safety Administration (NHTSA), the only agency required by law to consider the economic and safety impact of fuel economy increases.
Since this issue could severely affect our ability to provide our customers with the cars and trucks they need and can afford, our goal is to have regulators address legitimate questions about cost and affordability. With the help of Congress, we just might get that chance.
Take a Look at What’s New on NADA University
Have you browsed through Learning Hub and Resource Toolbox lately? NADA University is constantly enriching both centers with new content. Newly added online courses in Learning Hub include “Creating a Special Finance Operation” in the “Sales/Leasing/Finance” category, and “Overcoming Obsolescence” and “Unlocking Frozen Capital” in the “Parts” category. “Phone Fundamentals: Use Them or Lose Customers” is coming this month to NADA U’s new “Fundamentals” category. In Resource Toolbox, there’s a wealth of new entries under “Industry Information,” including NADA 20 Group’s Dealership Performance 2011 vs. 2010 and a SEMA study on “Influence of Accessories on New Vehicle Sales.” There’s also a new “Tip of the Week” category focusing on building strong customer and workplace relationships. Our new Driven Management Guide, A Dealer Guide to Federal Excise Tax Compliance, is also coming soon.
Watch New ‘Dealer Pain Points’ on NADAuniversityblog.com
NADA University continues to add to the popular “Dealer Pain Points” series. Look for these new videos and accompanying information: “Supersize Service Sales,” “Process Makes Perfect,” “Are You the Best-Kept Secret in Town?” and “Magic of Disappearing Profits.” All of these videos are in the “Service” category. In “Parts,” find “The High-Wire Act in Parts,” “Hide and Seek: A Costly Game,” and “Bermuda Triangle Swallows Parts Profits.”

Saturday, October 15, 2011

October 2011 SDADA Column


Stephen Wade has spoken several times in the past two weeks about the NADA-commissioned independent study on factors that drive return on investment, specifically as it relates to facilities. Currently, there is considerable “buzz” in the automotive press about this study which is expected to be completed by year-end.
Manufacturers often justify image programs on the grounds that “the store image must support the brand” and “customers expect all our stores to offer a similar look and feel.” But there’s little hard evidence of the return on investment of such spending, to either the OEM or the dealer. As a result, we dealers make facility investment decisions based on subjective factors, such as opinions and personalities, which – as you know – is no way to run a business.


NADA expects the study’s findings to be of use to dealers and OEMs alike, by moving the facilities debate away from opinion and assertion and more toward facts and data. Hopefully, the results of this study will put dealers like you and me in a better position to make informed, rational decisions about our facilities.
NADART
I just returned from Washington, DC (for the second time in five weeks - lucky me!) where I attended my first NADART Board of Directors meeting. I was just elected to this board in September.
NADART provides full service, low cost retirement plans - including 401(k), pension and profit-sharing options with available features such as automatic enrollment, Roth contributions, new comparability consulting and a low cost, flexible fee structure. NADART has offered retirement plan solutions to NADA members since 1957.
Recently, the scope of NADART’s business has expanded beyond the auto industry and it now provides retirement plan services to a wide variety of small businesses and organizations, as well as many larger businesses. Employers choosing a NADART employee retirement plan receive exceptional value at a low cost.
As I see it, there are two questions any dealer who does not currently sponsor a NADART plan might have. First, why should I offer a qualified retirement plan to my employees? The right employee retirement plan can help you attract and keep qualified employees and it can help secure your own retirement by building some net worth outside of the automobile business.
Secondly, why sponsor a NADART plan? NADART retirement plans are offered at costs that are much lower than competitors with comparable services. NADART services include 24 hour a day account access, on-site consulting service, complete plan administration services, low-cost educational workshops and a toll-free information hotline.
I’m sure some of you are using a plan offered by a customer or someone you know in your community. That’s what I did for some time. But I can assure you that it is worth your time to take a look at NADART’s programs. I saved a lot of money and my employees are “completely satisfied”(!) with NADART.
Approximately 2,000 automobile dealers and 90,000 participants use NADART for their retirement plan needs. If you have questions, call NADART at (800) 462-3278. If you know other small businesspersons who may considering sponsoring a qualified retirement plan for their employees, do them a favor and have them call that number. Please feel free to call me if I can be a resource in any way.
NADA, ATD Using Technology to Enhance Convention Experience
The NADA-ATD Convention is fast approaching and this year it will feature several enhancements to dealers’ convention experience, including:
- A NADA Convention and Expo Smartphone App that will put the entire convention website at your fingertips
- Interactive displays throughout the convention center that will allow you to search for workshops, franchise meetings and exhibitors using a quick and easy touch screen
- A Social Connection Zone featuring a high-end lounge with a social media wall, comfy chairs, coffee, free wireless Internet and recharging stations
- MyNADAPlanner, the convention tool that allows you to select workshops, note times of franchise meetings, schedule meetings with exhibitors and create a road map to the convention before even leaving the dealership
Convention registration is brisk, with five hotels already sold out. Remember to secure your airline reservations early. The convention coincides with the Super Bowl and that may make flights difficult. Register today at www.nadaconventionandexpo.org.

Saturday, October 1, 2011

September 2011 SDADA Column

At our Washington Conference board meeting, the NADA IT committee introduced the all-new NADA mobile app for the iOS (iPhone and iPad). I am excited to roll this app out because of all the potential it offers for our organization. I envision the app as the mobile portal to all things related to the automotive world.

For those of you using the iPhone or iPad, I would ask that you download the app, use it and provide me with some direct feedback – positive and/or negative. The only way to get this app to work for our member dealers is make it work for them. That is why your feedback is so important.

For those of you on the Android OS, we hope to have that version available soon. I will certainly keep you updated on our progress.

To download the app, go to the iTunes app store and search for “NADA”. The free NADA app should appear at or near the top of the list. Just download it and put it to work.

I look forward to your feedback.


Washington Conference

Myron, John Hageman, Mark McKie, David Hersrud, Dan Jacobson and I attended the annual NADA Washington Conference. While nothing I experienced there disputed the notion that Washington is broken, there were some reassuring moments from some of the speakers we heard from. We heard from John Boehner, Speaker of the U.S. House of Representatives, and Sen. Lisa Murkowski (R-Alaska) among others, but I was most impressed by 30-year old Rep. Aaron Schock (R-Illinois) who spoke at our NextGen reception. He is a very impressive young man. I advise you to keep an eye out for that name; you will see more of him!

Election Time
At our recent board meeting, we elected Bill Underriner as chairman and Dave Westcott as vice chairman for 2012. Underriner is a Honda, Hyundai, Buick and Volvo dealer in Billings, Montana. He is serving as vice chairman this year. Westcott is a Buick-GMC and Suzuki dealer in Burlington, N.C. They will take office at the 2012 NADA-ATD Convention and Expo in Las Vegas, which runs Feb. 3-6. I look forward to working with both gentlemen.

NADA Convention 

Stay Connected with the NADA and ATD Convention on Facebook and Twitter There are now more ways than ever to "connect" with the 2012 NADA/ATD Convention and Expo, Feb. 3-6 in Las Vegas. "Like" the convention's Facebook page (http://www.facebook.com/nadaconvention) and follow convention news on Twitter (http://www.twitter.com/nadaconvention) to receive instant updates on speakers, registration, exhibitors, hotels and more. Plus, stay tuned for NADA's new smart phone app coming this fall, putting the entire convention at your fingertips. And don’t forget to check out MyNADAPlanner, the tool that allows you to select workshops, note times of franchise meetings, schedule meetings with exhibitors and create a road map for the convention before even leaving your dealership. Convention registration is now open online at www.nadaconventionandexpo.org.

NADA has a great lineup of speakers for the event. President George W. Bush and Sergio Marchionne, chief executive officer of Chrysler Group, and chairman of Fiat Industrial S.p.A. are the scheduled keynote speakers for the convention. The inspirational address will be provided by Aron Ralston, who had to amputate his right arm with a knife to free himself from a boulder after a hiking accident. His autobiography “Between a Rock and a Hard Place” was the subject of the film “127 Hours.”

The 2012 convention, which runs Feb. 3-6 at the Las Vegas Convention Center, will mark the first time that the NADA and ATD conventions will be held together. The convention also includes workshop sessions, franchise meetings, hundreds of exhibits and a new Social Connection Zone. I believe that there is no other event that offers us dealers and our managers so much at one time in one location. Make plans to attend now!

Sunday, August 28, 2011

August 2011 SDADA Column


I hope you saw the email from NADA chairman Stephen Wade to directors that I forwarded to Myron and asked that he send to SDADA members. The email indicated NADA has commissioned an independent study that will take an in-depth look at the issue of manufacturer facility image programs. This one resounding concern is heard over and over and from all parts of the country, regardless of dealership size or brand.

As Stephen Wade put it in his email to directors: “The perception today is that facility investment decisions dealers must make are often based on subjective factors: opinions, pressure and personalities, which is no way to guide such significant spending. NADA has undertaken this fact-based study to look closely at the various factors that drive the return on investment of facility programs, both positively and negatively, in order to move the facilities investment decision onto an informed, rational and fact-driven footing. In other words, we want to find out the truth so these important decisions can be based on facts, not perceptions. The study will be completed in the coming months, with a detailed White Paper by the end of the year.”

I have made my opinion on this issue well known in this space several times. I hope this is the first step for NADA to fully engage on this topic.

Dodd-Frank Law Takes Effect with Implications for F and I Office


It's hard to believe it's been a year since Congress passed one of the biggest regulatory overhauls our nation has ever seen. I'm talking about the so-called Dodd-Frank law (also known as the Wall Street Reform and Consumer Protection Act), which takes aim at lending standards that Congress members believe led to the financial crisis of 2008 and 2009.

Thanks to our successful grass-roots campaign in 2010, dealer-assisted financing was saved from additional federal oversight under the Dodd-Frank law. But auto loans, and more specifically the processes our F&I offices use to issue them, have been affected by the new law, which includes several provisions related to disclosure of credit terms and action a creditor must take when turning down a loan application.

Here are two big changes every dealer should know about and some ways NADA is helping us comply with these new rules.

1. New credit score disclosures for adverse action notices – Starting July 21, creditors who use a credit score in taking adverse action (such as turning down a request for credit) are required to include the consumer’s credit score in the notices they provide to customers. To help dealers comply with this new rule, NADA has updated its “Dealer Guide to Adverse Action Notices,” explaining when an adverse action notice must be issued, what the notice must say, when dealers can rely on a finance source’s notice and other important issues. This guide also includes a model adverse-action notice that NADA developed for dealerships based on the government’s model notice. To download the guide, sign in to or sign up for NADA University at www.NADAuniversity.com, select “Resource Toolbox,” then “Driven,” and “Legal/Regulatory.”

2. Changes to the Risk-Based Pricing Rule – Also included in the Dodd-Frank law were changes to the Federal Risk-Based Pricing Rule (RBPR), which requires dealers and other businesses that use credit reports and extend credit to consumers to provide a new notice, known as a Risk-Based Pricing Notice, to customers who receive credit on terms that are less favorable than the terms received by a “substantial proportion” of their other credit customers. (Note, however, that the changes to the RBPR do not affect dealers who issue Credit Score Disclosure Exception Notices in lieu of Risk-Based Pricing Notices.) NADA’s “Dealer Guide to the Risk-Based Pricing Rule” has been updated to account for these changes. To download the guide, sign in to or sign up for NADA University at www.NADAuniversity.com, select “Resource Toolbox,” then “Driven,” and “Legal/Regulatory.”

In addition to the guides, NADA University has produced a brief video on the changes featuring NADA attorney Brad Miller. You can also view the archived webinar “New Credit Score Disclosures for Adverse Action and Risk-Based Pricing Notices” at www.NADAuniversity.com in the Learning Hub under “Legal/Regulatory.”

Thursday, April 7, 2011

Thursday, March 24, 2011

Hey Mom! I made the front page!!!

I was in my motel in Washington, DC after an NADA dinner on the Tuesday before Final Four weekend. I got a call from   from the Mitchell Daily Republic asking me for an interview about thirty Final Four trips. The interview lasted about 45 minutes and I swear that he was having more fun than me.

He was asking about various Final Fours and whether or not I saw them - and I did - every one of them in the past thirty years. I had fun reliving different games through the years. I have to say, I was surprised how vivid my recall was.

I have commented many times before that we have seen some great basketball but as the years pass, it truly is more about renewing friendships on an annual basis more than anything else.

Cheers boys! Here's to 30 more!




Wednesday, March 2, 2011

Thirty Years of Madness for this Final Four Duo

Knust (left) and Korth (right) at last year's Final Four in Indianapolis.

Every avid college hoops fan has seen the replay of Michael Jordan’s game-winning jump shot to lift North Carolina to the 1982 title over Patrick Ewing and Georgetown. Houston fans have had nightmares about Dereck Whittenburg’s high-arching air ball that Lorenzo Charles grabbed for the game-winning dunk as Jim Valvano’s North Carolina State Wolfpack edged the Cougars for the 1983 championship. The image of Keith Smart's shot arching high through the air before splashing through the net to give Bob Knight’s 1987 Indiana Hoosiers a one-point title game victory over Syracuse is familiar to most college hoops fans.


Choose any of the great Final Four moments of the last thirty years, Doug Knust and Chris Korth have been there to witness them. Knust, a car dealer from Chamberlain, South Dakota and Korth, an attorney from Kansas City, Missouri will be in Houston for this year’s Final Four. It will be the thirtieth consecutive Final Four that they have attended together. It’s a streak that started when they were seniors at Creighton University in Omaha, Nebraska.


Knust and Korth were juniors at Creighton 1981. In March of that year, they were looking for a place to watch the NCAA basketball tournament. They knew that ESPN was covering early round games but, unfortunately for them, the games were only on cable TV and Omaha’s cable provider did not carry ESPN. However, ESPN was available in Council Bluffs, Iowa, which is just across the state line.

Korth called over to a bar in Council Bluffs and got the good news that yes, they have cable and yes, they have a big screen TV (those were rare in 1981). The bad news was that they did not open till 5pm. However after a little begging and pleading they agreed to let Knust and Korth bring several of their friends in for a special private basketball watch party in their basement starting at 10 am. The next day, after thirteen hours of basketball, they emerged from the basement, weary eyed but hooked on the NCAA Tournament.

During the games that day in 1981, the NCAA ran a commercial promising a "chance" to go to next year’s Final Four. Simply call a long distance phone number and for a charge of $1.50 the NCAA will send you an application to enter the "lottery" to win tickets. Knust called in and got the application. He applied for the maximum at the time of four tickets (cleaning out his checkbook in the process). Knust says he’s not sure how much money he had to send in or where he got it. Several weeks later, he got the news that his name was drawn in the lottery and that he would be receiving four tickets for the 1982 Final Four in New Orleans. Now the problem: how does a pair of college students with no money, no credit cards and no plans get to New Orleans for the Final Four?

“I didn’t know how we would be able to get to New Orleans or where we would stay if we went,” recalls Knust. “Then I had a brainstorm. I decided to give a ticket to my Dad for his birthday in October thinking that maybe he would want to take me along, since I had my own ticket!”

Well Knust’s father, Harry, thought it would be a great idea if he and his son and a couple of his friends would make the trip to college basketball’s pinnacle. Korth made plans for airfare and the motel. Harry stepped up and paid for the motel room and the rest is history.

Knust and Korth, at the age of 21, attended their first Final Four in New Orleans in 1982. The entire weekend was magical and the basketball was unbelievable.

Korth tells a story from their first trip, “One late night, in a hotel lobby, we ran into then DePaul Coach Ray Meyer, one of the deans of the coaching profession. We got to personally meet, talk with and take pictures with Meyer.” Korth says, “He treated us as long lost friends, talking about his ‘love of the game’ for several hours. In the process, he infected us with a love of the game.”

Oh yeah, some North Carolina freshman makes a last minute basket to win a thrilling game for his team. His name is Michael Jordan. Knust and Korth were hooked!

Knust and Korth have not missed a Final Four since then, taking in some 87 Final Four games, in 18 different venues in 15 states and watching 46 different teams represent their respective schools. This year Reliant Stadium will be the nineteenth venue and the 88th, 89th and 90th Final Four games.

“One of the first things people usually ask me is something about which was the best or my favorite,” commented Knust. “That’s a bit like asking a father which is his best or favorite child. I’ve enjoyed all of them. Sometimes it’s the great games. Sometimes it’s the great individual performance. Sometimes it’s a great visit with one of the great coaches in the college game. Sometimes it’s a great restaurant. Each one is unique and wonderful in its own way.”

“If I told you, I’d have to kill you!” Knust joked when asked how they get tickets. “We used to get them through the lottery but we now turn to the scalpers to get our seats.”

Knust and Korth have been accompanied by various friends and family members through the years. Their group has been as large as 25-30 people and as small as 4 people. A couple of their friends have joined them for more than fifteen Final Fours.

“Needless to say, a streak like this requires an understanding spouse. My wife’s birthday is April 1st. I have been gone for quite a few of her birthdays over the years,” commented Knust. “That might just make her birthday a bit happier!”

Knust talked about how at the beginning, it was all about the basketball. As the years have gone by, however, he appreciates the opportunity to get together with great friends each year. “The basketball is still great and a big part of it, but I really love getting together with my friends,” says Knust.

“One tradition that we started about fifteen years ago was to visit a fine steakhouse in the host city on the Sunday evening,” told Knust. “It has really become one of the highlights of the weekend. There’s nothing like washing down good steak with a few beers or a couple of glasses of bourbon!”

When the streak started, Houston’s Guy Lewis and his Phi Slamma Jamma teams were near the top of the college basketball world. There was no such thing as a three-point shot or shot clock in college basketball. The tall, skinny players wore shorts that exposed their legs to mid-thigh.

This year, their party includes five other friends who have attended over ninety Final Fours between them. Emmet Kenney (21 trips) is a psychiatrist from Fargo, ND and a classmate of Knust and Korth at Creighton University. Bren Abbott (17 trips) is an attorney from Kansas City. Calvin Rider (18 trips) and Matt Hesse (9 trips) are attorneys from Wichita, KS. Abbott, Rider and Hesse were law school classmates of Korth at Washburn University in Topeka, KS. John Pollard (3 trips) is a dentist from Fargo, ND.

Knust said he’s looking forward to going to Houston. This the first time Houston has hosted the Final Four since 1971, before Knust and Korth started attending. When asked what was on their agenda besides basketball, Korth said, “We might visit a couple of Houston’s watering holes!”

They will be eating at Vic & Anthony’s on Sunday evening. While there will be plenty of discussion about college basketball at dinner, it’s a fair bet that there will be some conversation about an upcoming trip to New Orleans, the site of next year’s Final Four.