NADA chief to auto makers: Consult with dealers on tough decisions

DETROIT - Auto makers should consult with dealers more often and earlier when major decisions and policy changes are in the works, the chairman of the National Automobile Dealers Assn. says here.

NADA Chairman H. Carter Myers III, a Virginia dealer, says that too often such decisions “are sprung on dealers without warning.”

That's unfair because dealers have vested interests in what manufacturers do and how they do it, Myers says.

He adds it would behoove auto makers to consult more with their dealers who are “pragmatic business people with common sense and with much of their money invested in this industry.”

Seeking dealers' counsel can prevent auto makers from pursuing questionable courses and regretting it later, he says.

For instance, General Motors Corp. heeded its dealers, and in 2000 subsequently scrapped an ill-advised plan to buy and run dealerships.

That saved GM from “the debacle that Ford Motor Co. went through” when the No.2 auto maker tried to run dealerships in certain markets for three years, but called the whole thing off as a failure in 2001.

Myers says dealer-manufacturer relations are “definitely” better now than in recent years. He says that's because auto makers are listening more to dealers.

But he adds, “Don't just consult us on the easy decisions and drop the others on us. If there are tough decisions to make, put them on the table and talk to dealers about them. And not just a select few who are required to sign non-disclosure agreements.”

He says dealers can get “paranoid” about surprises because “we could get snuffed out of business” by industry ventures gone bad.

Myers, speaking to the Automotive Press Assn., was in the nation's auto capital for a meeting with the Detroit Auto Dealers Assn.

He says that his chairmanship in February started off on the right foot with good dealer-manufacturer relations. He declines to take credit for that, saying much of it has to do with auto makers taking it upon themselves to foster more harmony.

But he's taking nothing for granted, noting that one of his predecessors, Harold Wells, had a smooth term as NADA chairman until Dec. 13, 2000, when GM announced Oldsmobile's death sentence.

“I hope something like that doesn't happen to me,” Myers says. “So I won't breathe easy until I hand over the gavel to Alan Starling next February.”

Meanwhile, NADA chief economist Paul Taylor continues to predict 16.8 million vehicles will be sold this year. That would be the third-best year on record for auto sales.

Myers credits auto makers and dealers for keeping sales brisk amid negative economic conditions and uncertain times.

“Instead of the usual battening down of the hatches, the auto industry has responded in a creative, positive way to adverse situations,” says Myers, complimenting GM especially for introducing 0% financing in the aftermath of Sept. 11.

He says Wall Street analysts lately contact the NADA more and more “to find out what's going on at the automotive retail level.”

What happens there can transmit early signals of what's to come, says the NADA chairman.