Dealer Determined To Lead

For the second year in a row, the incoming chief of the National Automobile Dealers Assn. assumes a post previously held by his father.

During a tough time for the industry, Edward Tonkin, 54, becomes NADA chairman this month at the trade group's annual convention in Orlando, FL.

In 1989, when his father, Ronald, headed the organization, franchised dealers felt auto makers were overdoing fleet subsidies and depriving dealers of rightful profits.

The son is poised to lead a somewhat divided NADA after two of the largest auto makers - Chrysler Group LLC and General Motors Co. - have terminated more than 2,000 dealers as part of their post-bankruptcy reorganization plans.

The only other father-and-son NADA leadership duo is 2009 Chairman John McEleney of Clinton, IA, and Warren McEleney, who held the title in 1971.

John McEleney led NADA during a divisive period when terminated dealers looked to the association for help in their appeals to Congress to reverse or at least mitigate their losses.

In joining the fight, NADA took criticism from some surviving dealers who basically supported the streamlining efforts and expected the trade association to represent their interests over those of former members.

Those conflicting interests could become a front-and-center issue at the NADA convention Feb. 13-15.

NADA's next chairman is passionate, vocal and more than willing to share his opinions. Among them is an insistence NADA become a strong-willed advocate of dealers.

On the matter of dealership terminations, he says, “This issue is not going away, and NADA will continue to wage a battle.”

Ed Tonkin co-owns the 15-store Tonkin Family of Dealerships based in Portland, OR. Founded by his father, the auto group ranks 61 on Ward's Megadealer 100 ranking. It sold 7,262 new units with revenues of $470.9 million in 2008, but saw a 30% decline in sales in a tough 2009.

Ed, who holds business-administration and law degrees, runs the enterprise with his brother, Brad, 50, and his semi-retired father. Oregon is not immune to the effects of the massive dealership closures.

“The loss of long-standing Detroit-Three dealerships is devastating in one community after another,” says the new NADA chairman, who was 24 when his father led the association's battle against fleet subsidies.

“Ron still is an avid champion of dealer equity,” says his son. “He couldn't believe it when he heard all the anti-dealer talk out of Washington during the Chrysler and GM bankruptcy episodes.

“We Tonkins believe the future for the auto industry is bright as can be. Dealers account for 90% of the auto maker revenues. How can the guys who ordered dealer cutbacks be so misdirected?”

State laws forbidding involuntarily franchise terminations were pushed aside by federal judges considering GM's and Chrysler's bankruptcy cases. Ed Tonkin believes NADA needs a “better outreach” to abate the friction that the factory actions and court rulings brought about.

“We're caught in a crossfire with a divided dealer network,” he tells Ward's. “No one thought the anti-termination clauses in the state franchise laws could be erased since the U.S. Supreme Court upheld them 30 years ago.

“What the association needs is more open-ended board meetings, plus better relations with the federal government, which now has taken such an active role in helping run two of our largest auto makers.”

Tonkin would take under consideration a proposal that auto makers seat dealers on their boards of directors, a move many think could have stopped managements from dumping dealers so rashly.

The Tonkin group started as a Chevrolet outlet, adding 13 brands over the years: Acura, Audi, Dodge, Ferrari, Honda, Hyundai, Kia, Lotus, Maserati, Mazda, Nissan, Scion and Toyota. A new Audi dealership is in the works.

Oregon Business magazine ranks the Tonkin group the state's third-best company for which to work. It has remained profitable through the recession without imposing any layoffs.

“Tonkin's total employment of nearly 800 is slowly declining without drastic layoffs,” Ed Tonkin says. “We've been fortunate enough to confine employee reductions to attrition.

“But we're tuning up for a bigger year in 2010, pushing certified pre-owned sales at about 150 a month and looking for a 15% spike in volume.”

His children, Adam, 27, and Nancy, 24, both work in the family business. The group is Oregon's 17th largest private employer.