‘Thoughtfulness’ a Job Requirement for NADA Chairman

Veteran car dealer Wes Lutz speaks his mind more times than not.

After nearly 45 years in the auto industry, he knows it well. He’s expressive in voicing opinions as an auto retailer who’s been around.

But as the 2018 National Automobile Dealers Assn. chairman, Lutz offers talking points on discretion to Paul Walser, who assumes the trade group’s chairmanship.

Asked by Wards what advice he’d give Walser, Lutz says, “You have to realize you are representing 17,000 dealers, and your view on a particular topic is not necessarily NADA’s view.”

Walser, whose dealership group is Minnesota-based, becomes the organization’s top dog for this year at an inauguration this week at NADA’s annual convention, an event that dates to 1918.

The 2021 NADA Convention & Expo, beginning today, goes digital this time, because of COVID-19. Walser succeeds Ohio dealer Rhett Ricart.

Of Walser’s impending chairmanship, Lutz encourages Walser to “be careful about what you say. I’d say be thoughtful. Otherwise, you can make an off-handed joke, and someone’s stock could go down.”

Lutz recalls something along those lines happening to Texas dealer Charlie Gilchrist when he was NADA’s 2019 chairman.

During a UAW strike against General Motors that year, a journalist asked Gilchrist about the labor dispute and the stoppage of GM production for more than a month. Gilchrist quipped, “As a Ford dealer, I like it.”

Gilchrist was jesting, “but he took a lot of flak for that,” says Lutz, who recalls an off-handed comment of his own that inadvertently caused a stir during his chairmanship the year before.

Wes Lutz store

It was during a conference call with journalists. The final question was about automakers spurring dealers to ramp up some of their efforts.

Lutz, who owns Extreme Dodge, Chrysler, Jeep and Ram in Jackson, MI, replied he found it interesting automakers were asking dealers to do that when the OEMs were scaling back some of their initiatives.

“It was the frigging last question, and a story about my answer was in the next day’s Wall Street Journal. I had OEMs saying, ‘Why are you beating up on us?’”

Still, he says, it doesn’t make sense that automakers want dealers to build elaborate facilities – he calls them “Taj Mahals” – when car consumers are spending more time online and less at dealerships. Customers go to dealerships to buy and service vehicles, not take architectural tours. 

Lutz says he, Walser, Gilchrist, Forrest McConnell III of Alabama and other former NADA chairmen periodically huddle, remotely these days, to discuss the lobbying group’s policies and positions.

In those conversations is the NADA president, who heads day-to-day operations. Peter Welch retired from that post at the end of 2020. His successor is Mike Stanton, a NADA veteran.

Among challenges the association and its members face: Many startup electric-vehicle makers plan to follow trailblazer EV maker Tesla’s business model of selling vehicles factory-direct, rather than traditionally through franchised dealers.

Lutz questions the wisdom of that. “Dealers offer a competitive advantage to automakers – if we didn’t, something would be wrong. But we do.” To him, NADA must strive to get that message across to all parties involved in a vehicle sale, from buyers to builders.

Automakers themselves established the franchised dealership system in the early 1900s. They did so to avoid the onus and cost of a nationwide sales force, inventory and sales and service stores.

Wes Lutz at Extreme service

Those car companies figured it made more sense to put their money and effort into their core competency of designing and manufacturing vehicles. Lutz thinks they were right.

He likens the dealer franchise system to the front end of the auto industry.

“If you have the UAW, the most competent of people building cars, wouldn’t you want that as a competitive advantage?” he says, adding the same goes for dealers who sell to the end consumer.

Lutz lauds dealers’ ability to adapt to what comes their way. A recent example of that is how they altered the way they sell and service vehicles when the pandemic kicked in. “Dealers really stepped up,” Lutz says.

A state government mandate temporarily barred in-dealership sales in Michigan and many other states in the spring of 2020. Sales plummeted.

“We pared back and looked at every expense,” Lutz recalls. “I usually stock $12 million in inventory. We went down to $5 million. In March, we said, ‘If we can break even, we’ll be lucky.’”

The economy of his home market in south-central Michigan, 75 miles (120 km) due west of Detroit, is led by health care and utility providers. The Henry Ford medical network is Jackson’s No.1 employer. No.2 is Consumers Energy.

No.3 is the Michigan Department of Corrections, including what state residents call “Jackson,” but officially is Southern Michigan Prison. It is Michigan’s oldest and largest penal institution. Midwest farmland lies outside the city limits.

Even though times were tough for much of last year, “we didn’t face people reluctant to buy cars in Jackson,” Lutz says. “Jackson is a working community. People need to buy and service their vehicles.”

His dealership sells lots of Jeeps, particularly Wranglers and Compasses. Despite the stepped-up electric-vehicle efforts of many automakers, his customers aren’t particularly interested in EVs.

“There is not a guy on the planet more excited about electrification than me,” Lutz says. But the electrified vehicles he does stock, such as the Chrysler Pacifica minivan plug-in hybrid, don’t sell particularly well. “Our customers are not excited about EVs.” 

That could change, but currently Jackson, MI, is hardly the epicenter of the growing EV movement.

Lutz, 66, is eyeing eventual retirement after so long in auto retailing. For now, though, with the pandemic still looming, he says of society, “We just want to be back to normal.”

Steve Finlay is a retired WardsAuto senior editor. He can be reached at [email protected].