As a second-gen auto dealer and the daughter of an immigrant, Tammy Darvish thought it un-American the way GM andslashed their dealership networks as part of post-bankruptcy reorganization.
Tammy Darvish fights for dealer rights.
Tamara Darvish became irked as she sat in a Manhattan courtroom in 2009, watching painful automotive bankruptcy proceedings that affected thousands of dealers, including herself.
Then her emotions became more intense. Propelled by what she saw as a gross injustice, she began thinking of ways to address it.
As a second-generation auto dealer and the daughter of an immigrant, she thought it un-American the wayand slashed their dealership networks as part of post-bankruptcy reorganization plans.
She remembers listening to emotional testimony from dealers in that federal bankruptcy court about their vain efforts to stay in business.
“Grown men were crying, begging to keep their livelihoods, when they had done nothing wrong,” says Darvish, of the family-owned Darcars Automotive Group based in Silver Spring, MD.
She wasn’t an unaffected observer; Darcars’ threestores and its Chevrolet outlet were on death row, too.
Her initial feelings shifted into overdrive anger. “This should have never have happened in our country,” she says.
She went on to co-found a dealer advocacy committee, testify at congressional hearings and lobby on Capitol Hill to block the nationwide dealership closures that GM, Chrysler and a federal task force led by Wall Street financier Steven Rattner claimed were so necessary for the auto industry’s survival.
“It was the biggest scam since Watergate,” says Darvish, who has written a book about that chapter in automotive business history: “Outraged – How Detroit and the Wall Street Car Czars Killed the American Dream.”
It tracks the U.S. government bailout-rescue of teetering Chrysler and GM, the massive dealership terminations, the struggle to reinstate the franchises and Darvish’s role in fighting for legislation that didn’t reverse the terminations but ultimately gave dealers the opportunity to challenge the closings in third-party arbitrations.
Why did she write the book?
“First of all, I wanted to document this for history,” she tells WardsAuto.
“Secondly, I want accountability, particularly for those executives paid tens of millions of dollars and who made statements under oath before Congress and federal court,” claiming an excessive number of dealerships was financially bleeding the auto makers .
“And lastly, to see the bankruptcy law amended as far as the executory contract clause is concerned because, otherwise, anyone in the franchise business could be hurt in the future.”
Darvish says most reactions to the book are positive. She has not heard from either Chrysler or GM, although a field representative from one of the two requested several autographed copies of the book co-written with Lillie Guyer, a Detroit freelancer and WardsAuto contributor.
Two dealers, whom Darvish declines to name, contacted her to say they were miffed she didn’t mention them in the book.
Her advocacy role has made her well-known in the automotive world. Many people admire her determination as a dealer to stand up for dealers, especially for Chrysler retailers who were immediately axed without compensation. GM dealers had it a little better, with the auto maker creating a “wind-down” period and buying back inventory.
Someone quipped it shows what a dealer’s feisty daughter can do when crossed.
After her mother and father divorced when she was four, Darvish, 48, grew up in Chicago with her mother and twin sister. At 17, she decided to move to Maryland to live with her father, John R. Darvish, who had opened a single dealership in 1977 and grew it into a 20-store, 34-franchise business operating in three states.
Darcars ranks No.26 on the 2011 WardsAuto Megadealer 100. It sold 32,272 cars last year and posted total revenues of $851.1 million.
At her father’s urging, Tammy Darvish attended Northwood University in Midland, MI, and graduated in 1984 with a bachelor’s degree in business administration.
She started in the business selling cars at her father’s first store. Now married with two teenage children, she is executive vice president of the family business.
A few days after watching the jarring bankruptcy-court proceedings in Manhattan, Darvish called nearby Maryland megadealer and longtime friend Jack Fitzgerald. “We can’t solve this battle up here in New York,” she told him.
Fitzgerald, owner of Fitzgerald Auto Malls, already had been in contact with another dealer friend, Alan Spitzer of Spitzer Auto Group in Elyria, OH. Spitzer says they talked of the need to counterattack the dealer closings through lobbying and legislation.
Fitzgerald, articulate and thoughtful, emerged as something of a folk hero of the campaign to save the targeted dealers. In countless meetings with Congress members, trade group leaders, auto makers and media, he bristled at and analytically rebutted GM and Chrysler claims that they could save billions of dollars by closing dealers that ate into their finances.
“Dealers would have been fine if left alone to figure out the market dilemma; they would have recovered on their own,” says Fitzgerald, a multi-line dealer with 17 brands and 15 locations in three states.
Spitzer, who had met Darvish throughregional dealer meetings, admired her determination and saw her as playing a key role in the impending fight.
“I knew she had a lot of energy and was close to Washington,” he says. “She’s a straight shooter and says what’s on her mind.”
The three dealers created and became co-chairmen of the Committee to Restore Dealer Rights. The group was “really moving a rock uphill trying to get the new law enacted,” says Spitzer who, along with his daughter Alison Spitzer, also wrote about the saga in their book “Grand Theft Auto.”
Darvish grew impatient with some dealer organizations the newly formed committee turned to for help, claiming they were mired in bureaucratic delays and over-planned for Capitol Hill meetings and congressional testimony. There was no time to waste, she felt.
The National Automobile Dealers Assn. initially was not involved in the advocacy committee’s proposed legislation to save dealers. But Darvish, on theexecutive board since 1995, persuaded the trade group to endorse the bill. That helped open doors in Washington.
But Darvish was not able to use her persuasion skills to win over Mike Jackson of. The CEO of the country’s largest dealership chain refused to join the fight against the dealership closings even though AutoNation was facing the loss of 12 stores.
“Although we didn’t like the idea of closings, we felt it was necessary” for GM’s and Chrysler’s long-term health, says Jackson, who once ran Mercedes-Benz USA.
Darvish, he says, “was respectful of our opinion.”
Jackson says she has “the energy and the conviction needed to drive an agenda. She is knowledgeable and she her homework. The industry needs people like that.”
Elaine Vorberg also lauds Darvish and her drive as a “force of good.” Vorberg is an attorney and daughter of Chicago-dealer Nicholas D’Andrea, whose Buick-Pontiac-GMC store was on GM’s hit list.
Darvish “was very tenacious and passionate about what she was doing with the CRDR,” Vorberg says of the advocacy committee. “I had passion, drive and intelligence myself, but I never would have known where to start” to prevent the closing of her father’s dealership.
Among other things, Darvish gave her lobbying tips and directed her to two U.S. legislators from Illinois. “If it weren’t for Tammy, I don't think we would have gotten as far as we did.”
D’Andrea shuttered his store in July 2009 after settling with GM and before any of arbitrations had started. Vorberg says her father is now a salesman at another car dealership.
Darvish’s crusade has made her something of a celebrity. Last year, Manheim named her its “Woman of the Year.”
“But she was not in this for any type of stardom,” Vorberg says. “She just wanted to get the job done.”
That took a lot of time. Darvish recalls the bankruptcy judge sometimes didn’t end sessions until 11 p.m. She would arrive at the courthouse at 5:30 a.m. to make sure she got a seat.
She once tried to pay a homeless man to hold a place in line on the courtroom steps but he refused, saying it was too cold.
One of her biggest “aha” moments came shortly afteroffered its New York law firm to represent Chrysler dealers on the Unsecured Creditors Committee, she says.
Darvish figured that firm also represented the go-forward dealers who would keep their franchises. She saw a conflict of interest, so “I very nicely ended the relationship” with the firm.
One of the biggest victories for Darvish and the other Chrysler dealers on the creditors committee was getting the auto maker to throw out a second list of dealers also slated for termination.
The CRDR still exists, although it is dormant. Darvish feels there are still unresolved issues.
She’d like to see some movement from the federal Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, about the use of tax dollars to close dealerships.
SIGTARP’s initial audit came out in July 2010. It remains classified as ongoing. But nothing further has been done since the automotive task force challenged the findings or since SIGTARP chief Neil Barofsky resigned last year.
Spitzer and Vorberg don’t expect anything more from SIGTARP. Darvish isn’t convinced, saying, “I have plans in mid-February and in March to make a whole bunch of noise about that.”
Has the Capitol Hill experience made her consider running for office?
“No, I don't have any political ambitions, although eventually I'd like to retire as an ambassador to Italy,” she quips.
For now, she wants to “focus on running our dealerships and growing them, continuing to make a difference and getting my kids through high school.”
She also is thinking about acquiring more stores and is “focusing more on the service and parts side. We used to let service and parts run by themselves, regarding them as sort of ‘back there.’”
Her family’s remaining Chrysler and GM stores “aren’t breaking any records, but we’re profitable.”
She adds, “We lost one Chrysler store in Fairfax, VA, and one Dodge store in Jacksonville FL. We also lost a Chevrolet store in Maryland but we were given it back prior to having to go to arbitration.”
She splits management duties with two brothers, Jamie and John.
Their father, John R. Darvish, founded what would become Darcars 35 years ago after buying that single dealership, Glenmont Chrysler-Plymouth in Silver Spring, MD.
That was 15 years after he arrived in the U.S. from Iran to attend medical school. He started selling used cars in 1962 on summer break, fell in love with the business and never looked back.
His daughter says he started expanding his business in the early 1980s by buying “very financially stressed” dealerships. In 2004, Darcars hit the $1 billion mark in annual revenue.
The elder Darvish, who suffers from Parkinson’s disease, remains chairman.
The company employs about 1,860 people, down from a peak of some 2,100 just a few years ago. Tammy Darvish says retirements and voluntary departures accounted for most of the decrease. Her father refused to pink-slip any employees during the hard economic times.