It bothered National Automobile Dealers Assn. leaders to learn something as they lobbied for some key causes this year and last.

They discovered a lot of lawmakers, journalists and average citizens know little about the workings of the U.S. auto industry in general and the dealership model in particular.

So during their recent public-persuasion efforts on various issues, NADA had to mix in crash courses in automotive 101. Those included:

  • Urging Washington to throw financial life preservers to General Motors and Chrysler, because if those two sank it would have created a tidal wave – not a ripple in the nation’s economy, as some clueless politicians had insisted.
  • Persuading Congress to let terminated GM and Chrysler dealers use third-party arbitration to challenge the yanking of their franchises, particularly in cases that seemed to defy marketplace logic or basic fair play.
  • Convincing Congress that dealers, because they personally don’t make auto loans, should not be part of a finance-reform act aimed at lenders.

Dealers have prevailed in all of the above. It took some doing though. Moreover, some miffed critics claimed lobbying dealers who descended on Washington twisted some arms out of sockets.

But NADA Vice Chairman Steve Wade says dealers stuck to the facts while presenting their cases. That often meant undoing some people’s mistaken notions on topics such as how cars are sold and financed.

So dealers found themselves saying:

  • “No, we do not work for the auto companies. We are independent business people.”
  • “No, we do not sell cars on consignment. We buy them from the manufacturers, which is why floorplan credit is so vital to us."
  • “No, we don’t do auto loans. So please don’t include us in legislation directed at lenders who do auto financing.”


It required patience, perseverance and persuasion on NADA’s part, but the results were rewarding, Wade says at a recent 2010 F&I Management and Technology conference in Las Vegas.

“Most people we talked to got it,” he says. “Congress got it. Government can assist and partner, but there is a need for government understanding of how the dealership model works.”

But the initial lack of understanding in Washington unnerved some NADA officers, such as John McEleney, the trade group’s 2009 chairman.

He spoke last year to members of the federal task force established to oversee the post-bankruptcy reorganization plans of GM and Chrysler. He calls the membership well-meaning but skewing towards “Wall Street MBAs,” who “treated a multi-billion-dollar crisis like an Ivy-League case study.”

To NADA, it didn’t make sense for the panel to insist on the wholesale closings of thousands of dealerships, costing about 10,000 jobs in the depths of the recession.

McEleney recalls asking one task-force member how long the panel had been studying the issue of an auto industry in crisis. The reply: “About six hours.”

An English art curator once described efforts to get people to see the “art” in a valuable piece of art, especially if it is an abstract work that may look like the artist filled squirt guns with paint and took aim at a canvas. But if that were the case, why is that piece in a museum?

The curator said, “Some people see the art on their own. Some people see it when someone points it out to them. And some people don’t see it either way.”

NADA discovered something along those lines. Some public officials “get it” quickly. Some never will. But there’s a big middle that understands after someone points it out.

“We need to educate people,” Wade says, indicating auto dealers have learned you can’t assume someone knows the finer points of who you are and what you do. “Open communications have proved invaluable to us.”