Special Coverage

NADA Convention & Exposition

NEW ORLEANS – It was Mardi Gras and the mood was festive in 2005, the last time the National Automobile Dealers Assn. held its convention here.

Six months later, Hurricane Katrina hit, changing everything. The Big Easy had become the big disaster zone.

Now NADA is back, with the usual glad-handing and camaraderie. Yet for many dealers, this year’s gathering is less about celebrating and more about surviving during an economic storm that began in 2008 and still is raging.

“Will and spirit would not let New Orleans die, even though Katrina washed away just about everything for so many, including dealers,” says convention Chairman Jeff Carlson. “They didn’t ask for that storm, and we didn’t ask for this economy. But they persevered and so will we.”

It means a lot to this city to have the dealer group back, something Carlson says didn’t seem possible a few years ago, considering the extent of the devastation.

Holding the convention here goes far towards helping the city recover, says Robert Israel, president of the Louisiana Automobile Dealers Assn. “There’s no question New Orleans depends on its convention business, even more since Katrina. It’s the biggest part of the city’s economy.”

For all New Orleans suffered through, the main tourist areas including the French Quarter avoided the worst of the damage due to their high-ground advantage.

“Every place a conventioneer goes looks better than it did before,” Israel says. “Virtually all the hotels knew after Katrina business would be way down, so during that lull they renovated from top to bottom.”

Renovation costs were more than a drop in the bucket, totaling $400 million. Another $60 million went towards restoring the Morial Convention Center here. Many remember the center as the place where many Katrina victims fled and fought for their lives, prompting headlines such as “Mob Rule in the New Orleans Convention Center.”

Today, NADA convention signs and banners decorate the sprawling facility for the annual gathering, albeit a scaled-back affair this year. Attendance is down about 30%, and the exposition floor has been reconfigured to account for fewer exhibitors. The themes of many workshops reflect the current times.

“Many workshops now are really focused on protection, recovery and dealing with smaller numbers,” Israel says.

Yet, a number of auto retailers that might have attended a NADA convention in a good year are skipping this one.

“I talked to many dealers who were pre-registered, but then decided they needed to be back at their stores,” says Wayne Fortier, a dealership consultant. “Some of them are really hurting. A Honda dealer called me and said, ‘When will this end?’”

Dealers in cost-cutting modes are more likely to be convention no-shows, says Paul McDonald, a Mazda dealer in Bountiful, UT, and a dealership information-technology consultant.

“Dealers usually come here to walk the exhibition floor and buy things. But if they are not buying for austerity reasons, they figure, ‘Why come?’ Nine of 10 clients I talked to are asking how they can save money. So in that regard, coming here is a struggle.”

Why is he here? “To find out what the heck is happening,” McDonald says, referring to conditions affecting dealers. “You’re not going to find that out at any better place than this. You could argue that those who are here are the ones most interested in surviving.”

Attendees are concerned about the economy, the future of certain auto brands and auto makers’ efforts to reduce dealership ranks, says Alan Starling, a Chevrolet dealer in St. Cloud, FL, and 2003 NADA chairman.

“I’m pretty upbeat though, because I don’t think it can get much worse,” he says. “Dealers are typically optimistic. That sometimes can be a fault, but this time it can be an asset.”

Starling says he bought some store furniture on the exhibition floor, where vendors seem in high gear. “There’s that old saying that nothing happens until someone buys something. But this is a great business. That we’re all here and kicking is amazing.”

It’s also been a jolting year for 2008 NADA Chairman Annette Sykora, whose term covered one of the most difficult times in the association’s 92-year history.

“Do you remember when we were together around this time last year?” she asks attendees at the convention’s opening ceremonies. “Do you remember what was our biggest issue? Can you believe it was CAFE (corporate average fuel economy)?”

Not that CAFE is unimportant now, Sykora adds. “But by the end of 2008, it had been run over by a much bigger priority – our very survival.”

She tells of the December closing of a Pontiac GMC dealership down the street from her Ford dealership near Lubbock, TX. “You can’t explain how depressing it is to drive past an abandoned dealership every day; how it leaves you with an empty feeling.”

Still, Sykora is hopeful. “I have no doubt the franchised dealer network will continue to be the most cost-efficient, dependable way of distributing vehicles. You simply cannot replace the value we add to our communities.”